sale of rental turned primary residence

[Eric Doud]

My parents built a house in the late 80s in the San Diego area and rented the house for 15 years. Then in 2002 they remodeled the house and made it there primary residence and lived there for 10 years. At that time they moved to Montana and rented the house for two more years before selling the house. As I understand the tax code if you live in the house 2 of the last 5 years you don't pay any capital gains taxes? am I right? What about re-paying the depreciation for the first 15 years and the last 2 that the house was a rental?