We own a rental property in the same town we live for 25 years. No Mortgage. T avoid Capital Gains, can my husband move into this house on paper for two years to claim it as his primary residence? What does he have to change? Period? Do we have to file sepeately? Any advice would be appreciated.

Two years is probably not long enough for the IRS to forgive the capital gains issue. I suspect you would have to live in the property for AT LEAST seven and probably ten years to get the capital gains issue forgiven.