No, that is a very outdated law. If you meet the qualifications, you can exclude up to a certain amount of money.
You can exclude $250,000 ($500,000 for married filing joint) on the sale of a house if:
- You owned the house 2 or more of the last 5 years
- Lived in the house as a primary residence 2 or more of the last 5 years
If you have both lived in and owned the house for 2 of the past 5 years, you will have no tax effect if you file jointly and have less than $500,000 gain on the sale. There are some exceptions, like having reported a home office or used it as a rental.
