The rule is, if you lived in the property as your primary residence for at least two of the last five years you owned it, counting back from the date of closing on the sale, then the first $250K of gain is exempt from capital gains tax. If married filing joint then the first $500K of gain is exempt.
For properly reporting this in the TurboTax program, your situation is somewhat "unique" is that you flat out will not be able to report it in the SCH E section of the program. That's because when you converted it, your FMV used for depreciation was less than what you paid for it (I am assuming). So the program can't deal with the correct numbers in the SCH E section and it will not show the correct amount of gain, thus making your tax liability (if any) on the gain higher than it should be. You will have to report this sale in the "Sale of Business Property" section of the program.
But you'll deal with this when that time comes. Just make sure you keep every sliver of paperwork you are provided at the closing. Also understand that your gain will be higher than you expect too, and you will be paying taxes on some of what you may "think" is gain.
When you sell rental property you are required to recapture all prior depreciation taken on that property and pay taxes on it, in the year you sell. You will pay taxes on that recaptured depreciation no matter what too. The recaptured depreciation is not included as part of any tax exempt gain.
One more thing too. If you moved as a condition of employment or continued employment, you "may" qualify for additional leeway on the "last five years you owned it" part. But again, you'll deal with this at tax time when that time comes.
