Bob -

The two out of five only works if it was your principal residence the ENTIRE time.  The issue here is the property was a prior rental property and then converted to a principal residence.  When that happens the IRS says there "may" be a period on nonqualified use.  And if so then an allocation of the gain must be done for that period.  This site won't allow for web links but search for moving into your rental to avoid taxes.