But you might not have heard the full story.

Bob D. Scharin, senior tax analyst from the tax and accounting business of Thomson Reuters, calls the law that took effect Jan. 1, 2008, "the ultimate tax rate reduction." But as is often the case with tax provisions, this modification comes loaded with restrictions.

First, the elimination of capital gains tax applies only to assets owned for more than a year. Short-term sales remain taxed at your ordinary tax rate.

Then there is a monetary cap, as well as a limited time frame to take advantage of the tax break.

And it's not for every investor. Some young investors have been expressly excluded from the zero percent option. Others, such as Social Security recipients, could find that untaxed capital gains might mean new or additional taxes on their retirement benefits.

So before you rush to your broker to sell all your stocks and mutual funds, check out the new law's finer points and how they might or might not apply to you.

Limited to lower incomes

The first, and for most the biggest, hurdle to overcome is the earnings limit. Individuals in the two lowest tax brackets -- 10 percent and 15 percent -- can sell long-term assets and escape any capital gains taxes.

While the percentages are low, when you consider dollar terms, the amounts look a bit more feasible. The 15 percent bracket for tax year 2010 goes up to $34,000 for a single filer; $45,550 for a head of household; and $68,000 for a married couple filing a joint return.

Even if you make more than the maximum for your filing status, you still might be able to take advantage of the zero percent rate. The reason: The cutoff amounts are taxable income, not the larger adjusted gross income amount.

"People are used to having deduction phaseouts tied to adjusted gross income," says Scharin. "This one is geared to taxable income."