Account types

Definition

US account types are tax-and-rules containers: TAXABLE brokerage (cash or margin — full instrument access, annual taxation of realized gains and income), TRADITIONAL IRA (pre-tax contributions, deferred growth, ordinary-rate taxation on withdrawal), ROTH IRA (post-tax contributions, tax-free qualified growth), plus employer plans (401(k)) and margin-restricted variants of each. Facts, never advice: the same trade produces different after-tax results and faces different mechanical permissions in each container, so the engine treats account type as a first-class execution parameter.

How it works / structure

• The tax mechanics (engine-executable): taxable accounts realize character (short-term ordinary vs long-term preferential rates; qualified vs ordinary dividends; acct-wash-sale and acct-assignment-tax apply in full); traditional IRAs defer everything to ordinary-rate withdrawal (character is destroyed — a long-term gain and a short-term gain exit identically); Roth qualified withdrawals are untaxed (character irrelevant); contribution limits, income phase-outs, and required minimum distributions are IRS-published parameters, refreshed annually.
• The permission mechanics: IRAs cannot carry margin debit balances (limited-margin variants permit settled- funds trading without T+ violations but no leverage or short stock); options approval tiers in IRAs typically cap at defined-risk strategies (broker-specific); acct-pdt-rule binds margin accounts only; futures in IRAs exist via specialty custodians (per-broker data).
• Cross-container interactions with teeth: the wash- sale IRA destruction case (acct-wash-sale — replacement in the IRA kills the taxable loss permanently); asset- location facts (income-heavy strategies generate ordinary income taxed annually in taxable accounts and invisibly in deferred ones — the LOCATION of a strategy changes its after-tax profile at fixed pre-tax returns).
• The platform’s frame: account type enters replay as a tax-and-permissions overlay — the same strategy is replayed per container, and the differences are quoted as facts.

When it applies

Strategy-to-account routing (which container may and should execute what is a fact table plus a user decision — the platform supplies the facts); after-tax replay (the only honest cross-account comparison); permission gating (an undefined-risk strategy is mechanically unavailable in most IRAs — eligibility computation, acct-margin-rules).

Risk profile & failure modes

• Character destruction ignored: long-horizon, low- turnover strategies lose their preferential-rate edge inside traditional IRAs (everything exits at ordinary rates) — a documented-mechanics consideration the routing table surfaces.
• Permission surprises mid-strategy: assignment events in restricted accounts (an assigned short put in an IRA without settled cash) trigger broker liquidation mechanics (acct-settlement funding audits per container).
• Contribution-limit collisions: strategies assuming capital additions hit annual IRS limits in retirement containers — the capacity is a published constant.
• Advice boundary: which container a user SHOULD use depends on personal tax facts the platform does not hold — the entry supplies mechanics; routing recommendations stay descriptive and conditional by design.

Evidence & limits

IRS publications and SEC investor materials are the primary sources (cited); limits and rates are annually-updated parameters, stored versioned. Broker-specific IRA permissions vary — per-broker data, refreshed. Everything here is mechanics; suitability judgments are explicitly out of scope.

Falsifiable-thesis examples

Illustrations only, not signals:

• “Strategy S’s after-tax replay ranks the three containers identically across the tested rate assumptions (location-insensitivity check)” — falsified by a rank flip.
• “Every strategy this account executes is within its container’s permission tier (eligibility audit)” — falsified by the gate scan.

Cross-references

• The rules per container: acct-margin-rules, acct-pdt-rule, acct-settlement
• The tax interactions: acct-wash-sale (IRA destruction case), acct-assignment-tax, acct-section-1256
• The allocation layer above: port-allocation-frameworks