Hi @RES47810 - thanks for your question!
The five-year lookback period starts on the date that the property is sold, So, you are correct, to qualify for the exclusion you would have to sell the property before July 2023 in order to have two years of use as your principal residence within the five-year period.
Also, be aware that although you will not have any capital gains tax on the first $500,000 of gain if you qualify for the exclusion, you will be taxed on the unrecaptured Section 1250 gain due to the depreciation you claimed after you converted the property to a rental. The Section 121 exclusion (also known as the "home sale exclusion") does not apply to Unrecaptured Section 1250 gain. The only way to defer tax on this gain would be to complete a 1031 exchange, but this is a complex topic beyond the scope of your original question, and it might not work for what you want to do as it requires you to reinvest all the proceeds in additional real estate.
I hope this information is helpful!
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