NEW CAPITAL GAINS TAX EXEMPTIONS

From an attorney friend of mine:
You know the tax law that says your home is exempted from capital gains taxes when it serves as your personal residence two out of the five years prior to a sale? It looks like that has been changed.
The "Housing and Economic Recovery Act of 2008" eliminates the capital gains exclusion for the portion of gain that comes while a home serves as a vacation or rental property. The provision is effective Jan. 1, 2009.
That means for houses sold after 1/1/2009 you would have to pay capital gains taxes on a portion of the gains. If you lived in it for 2 years and rented it out for 2 years you would pay capital gains on 50% of the gain you made! Under current law, you would not.