New Real Estate Tax Break 101 - A CPA gives the whole run down

My CPA has put it all down in one easy to understand briefing.  I have attached it as an "informed" professional testimonial for what the new law entails.  I am sure many have re-capped it in their own words, but I wanted to get it straignt from a pro who does this for a living.  Hope it helps all of you.

FIRST-TIME HOMEBUYER CREDIT UPDATE!  November 16, 2009 Dear Robert,   We are contacting you today to alert you to a significant change in the First-time Homebuyer Tax Credit that was written into the recently passed Worker, Homeownership, and Business Assistance Act of 2009. Especially as the close of the current tax year approaches, you may want to take certain steps to maximize your tax savings under the new law.  We are here to assist you and answer your questions.  First-time homebuyer credit:   The first-time homebuyer credit is one of the most popular tax incentives in recent years. However, it is not a permanent tax break. It is temporary. Its originally scheduled expiration date of November 30, 2009 prompted Congress to extend and expand it.  The new law extends the maximum $8,000 credit for principal residences purchased on or before April 30, 2010.  If a taxpayer enters into a binding contract (i.e. enters escrow) before May 1, 2010 to close on the purchase of a principal residence before July 1, 2010, the credit will apply.  Members of the U.S. armed forces, foreign service and intelligence community may have additional time to claim the credit if they are serving on qualified official extended duty outside of the U.S.  Until now, the credit was limited to first-time homebuyers.  The full credit (the $8,000 credit) is still limited to first-time homebuyers.  However, some long-time residents of the same principal residence may be eligible for a reduced credit of $6,500.  Generally, you must have owned and used the same residence as your principal residence for any five consecutive-year period during the eight year period ending on the date of the purchase of a subsequent principal residence. This provision is intended to help younger homeowners who are trading up and seniors who may be looking to downsize.  Another change in the new law is notable in enabling many more taxpayers to take advantage of the credit. Congress raised the income phase-outs for the credit. Previously, the credit phased out for single individuals with modified adjusted gross income (MAGI) between $75,000 and $95,000 and for married couples filing joint returns with MAGI between $150,000 and $175,000. Under the new law, phase out starts for single individuals with MAGI at $125,000 and for married couples filing joint returns with MAGI at $225,000.  The homebuyer credit can be very valuable. The credit is also very complex. In addition to the provisions we have described, there are special rules for repayment, new documentation requirements, a purchase price cap, and more. Please contact our office for more details about the credit.  Sincerely yours, Michael Silverberg, CFP, EA Coleman Cook, CFP, EA, MBA   Check for comparable neighborhood prices at www.foustonline.com, Home searches will help you to see what the market is saying.  Also review neighborhoods to get a comparison of the areas.