I am going to be the devils advocate on this one.
Cathy, why are you looking for a skip for your son? Is he unhappy in his current class? You mentioned he is two years ahead in reading. How are his other skills? math? writing? The reason I am asking this is that I have seen younger kids struggle when put in classroom with older kids, specially at that young age. The other children tend to either "baby" or worse yet to "bully" them.
Just from experience. My dd is actually one of the oldest in her class. I wouldn't have it any other way. This has been great for her. She is self assured, confident and happy. She started reading at 3, so when she started 1st grade she had been reading chapter books for years. Her reading/writing is still way ahead of her current grade level, but her teacher is doing a great job of meeting her needs in this area within the classroom.
I don't know you child, so forgive me if I am putting my foot in my mouth on this one, but at 5 I wouldn't want my child to compete with 7 and 8 year olds unless he is globally gifted, extremely mature, unhappy where he is AND his needs not being met. Have you considered subject acceleration?
Of course, if his needs are not being met and he is miserable in his current situation than I guess I would be doing what you are doing.
