Thanks for all the responses/info.
Some more info: if I move, it wouldn't be on a temporary basis because the eventual goal would be to have us both living in the same place. Yes, I planned to buy another house back east, but come back to AZ every week or so for the weekend. I understand that this would not classify as a permanent resident of AZ and would not be allowed to consider my AZ home as my primary residence, so I think we're at the point where I just need to figure out the FTHB credit issue should we leave before 5/12. We don't have to; we were just curious as to what we would be looking at in terms of options.
I've gone through Form 5405, Gain/Loss Worksheet (from 5405 instructions) and Worksheet 1 from Pub 523 (used to calculate Adjusted Basis) using real basic figures. If I did everything correctly, then I think we're going to be okay. I think the big thing for us is that we made a lot of large improvements (AC, roof, windows, brick wall replacement) to the house the two years we've been there, which significantly increases the Adjusted Basis and we'd be selling it for a little less than what we actually paid for it (guess we should have waited a few more years to buy :) )
The worksheets were fairly straight forward.
Pub 523; Worksheet 1:
purchase price ($160k), less seller paid points (none) and other fees (none), plus additions/improvements ($18k), less depreciation and other decreases ($8000) to arrive at my Adjusted Basis (Worksheet 5405, Line 4) = $170k.
I took the estimated selling price (approximately $150k, but it is dependent on multiple factors), less selling expenses. I then subtracted the adjusted basis ($170k), less the FTHB credit ($8K), arriving at a loss of $12k. The Gain/Loss worksheet says that "If line 7 (gain/loss) is -0- or less, check the box on line 13b of Form 5405...". ($12k) is less than 0, so 13b is my option.
13b states: "I sold (including through foreclosure) the home to a person who is not related to me and did not have a gain on the sale (as figured using the worksheet in the instructions). No repayment of the credit is required. Stop here."
My biggest concern is that I'm missing something. My education background was in accounting, which included taxes, but I haven't worked in that field since I graduated, so I'm a little hesitant to say I'm 100% right.
If I'm not missing anything, then, honestly, given that I'm not planning to be in the home long-term, it's my best option to sell the property, as long as I can get what I owe on the property, paying the realtor with cash.
Thanks again for your thoughts/assistance though. I'll definitely have to look for someone if we are able to make the move and decide to make it.