The tax code changes almost every year. Usually in ways that are overly cumbersome and often in ways that cost you money. The most recent changes in the tax code — signed into law by President George W. Bush in late May — are different, though. These changes actually offer you some opportunities.

According to Stephen S. Meredith, CPA, the owner of a private accounting firm that focuses on creating and implementing wealth-building strategies for business owners, investors, and real-estate professionals, the new tax laws offer big opportunities for investors.

Here’s what Steve has to say (passed on to me by Dr. Van K. Tharp, the founder and president of the International Institute of Trading Mastery Inc.):

Perhaps the biggest news in the new tax law involves the potential gains that can be realized by long-term investors. That’s because of the cut in capital-gains taxes.

Simply explained, capital-gains taxes are the tax man’s cut of your profits when you sell an appreciated capital asset — a stock investment, say, or a piece of real estate. When you sell or otherwise dispose of an appreciated asset, the difference between the sale price and what you paid for the asset is your “capital gain.”

Every time the tax law is changed, it seems, these capital-gains rates are tinkered with. And they were adjusted yet again in the tax law of 2003.

Under pre-2003 Act law, any net capital gain you realized was taxed at a maximum rate of 20% and a minimum rate of 10% (for low-income earners) — provided you held the asset for more than one year. If, however, you held the asset for more than five years, you would have paid even lower taxes — 18% and 8% respectively.

Now, though, that’s changed. The new rate on long-term capital gains — effective for sales of investments after May 5, 2003 — is 15% if you’re in a tax bracket that requires you to pay more than 15% in taxes and 5% for taxpayers in the 10% and 15% brackets. And that 5% tax rate is reduced to 0% (yes, zero percent!) after 2008. This reduction in tax rates increases the “spread” between regular tax rates and capital-gains tax rates in all brackets.

What can this mean to you?

Well, let’s assume — just for the sake of argument — that you’ve realized a $200,000 gain on a stock transaction and that you’ve owned the shares for more than five years. Under the old law, that gain would have been taxed at 18% — for a tax bill of $36,000. Now, that tax “bite” is reduced by $6,000, down to $30,000. The tax bill on a $1 million transaction, meanwhile, would drop from $180,000 to $150,000.

At the same time, this reduction in long-term capital-gains taxes should help you decide what to do with underperforming stocks on which you’ve realized a gain. Let’s say, for example, that you’ve owned shares of an electric utility for more than five years and that you have a gain of $100,000 on those shares. Now, though, those shares are down from prior high levels and the company’s outlook has weakened. In the past, faced with an 18% tax bite ($18,000), you may have opted to hold on to those shares simply for tax purposes. Faced with a capital-gains tax bill of $15,000, however, you may well want to dump the shares in favor of another long-term investment with a brighter outlook.

By design, the shift in tax policy makes short-term investing unattractive. Reduced capital-gains taxes only apply to assets held for at least one year. Shorter-term gains continue to be taxed at substantially higher, ordinary-income rates. This means that savvy investors will opt for long-term investments rather than short-term plays.

All told, now is a good time to review your portfolio to make sure you’re in a position to take full advantage of these lower long-term capital-gains-tax rates — to consider beefing up your portfolio with long-term investments and, perhaps, to unload underperforming assets you’ve held for more than five years. As always, though, it’s a good idea to seek wise counsel before taking action.