If it was held over 5 years, you are right, the exclusion applies.  Your original post just said 5 years.

Your original post also said that the program eliminates the exclusion when you indicate that it was acquired in a 1031 exchange.  So that is the problem.  Whether or not the program is incorrect with doing that or if you have the dates wrong (it needs to be over 5 years), you'll need to figure that out.  If the program is wrong, just uncheck the 1031 thingy.

As for the Nonqualified Use to prorate the exclusion, I am almost certain that the program is able to do that.  However, I am a ProSeries users, so I can't specifically guide you how to do it, except for suggesting to look for the term "Nonqualified Use" on the screens.