There is Taoist sect variation on the position regarding sexuality, but there is no position that could be called “prudish.” There is also no particular condemnation of homosexuality.
Homosexuality is certainly not regarded as a violation of Divine Law, and is really given no special status-positive or negative.
The condemnation of homosexuals present in other religions does not exist within Taoism. From the Taoist perspective, this condemnation is simply humans desiring to pursue the power of hatred, but being too guilty to acknowledge their desire for hatred. That guilt leads them to mask a human desire as an element of divine law. Such errors inhibit spiritual development.
In regards to sexuality in general, the following principles should guide you:
- If a person is going to engage in sexual activity, the person should be skilled at it and develop his or her sexual knowledge.
- Restraint is recommended. It is rarely to a person’s advantage to behave irresponsibly with qi, and sex depletes qi.
- Saturation of the senses, typical of the sex act, should not be a focus of one’s life. A human being is worth more than a life lived for sensory saturation.
- Sexual behavior should follow clearly established relationship boundaries, as established between partners.
- Excessive sexual activity is usually an indicator of a poorly met basic need or underdevelopment of the whole human. In other words, your life is pretty limited if you are occupied with the spread or restriction of sexual behavior.