Tax on Sale of Home

I think you've mixed up two different tax breaks.  Anyone can take up to $250,000 capital gain (actual profit) on the sale of a principal residence ($5000,000 for a married couple filing jointly) if they've owned and occupied the house for at least two of the five years before the sale.  Their income has nothing to do with it, neither does their age, neither does what they do with the proceeds, and it doesn't matter if they've taken that tax break years before on the sale of another home.

You may have read that from 2009 to 2010, people in the lowest tax brackets may have some of their capital gains qualify for a federal capital gains rate of zero tax rate.  That's on any kind of profit, not particulary on the sale of one's own house, which is covered by the tax break I described above anyhow.