Welcome to Midland Trust
Thank you for choosing Midland! Congratulations on completing step one of your self-directed investing journey!
Step 1 – Open Your Account
Step 2 – Fund Your Account
Once you open your account, it is like an empty bank account that needs a deposit. Here’s what to expect in this part of the process. There are three ways you can fund your account.
Transfer From Another IRA
Most of our clients are funding their accounts with this method. Most clients complete the Midland transfer form during their account opening process. You can check the status of your transfer by visiting your Midland360 client portal.
A cash transfer is a movement of funds between two IRA accounts. This process is initiated through the receiving custodian. The transfer process typically takes between 5-15 business days.
An "In-Kind" transfer is a movement of any NON-CASH asset between two IRA accounts. Because asset re-registration is involved, an "in-kind" transfer can take several weeks.
Rollover (From an Existing Employer Plan)
A rollover is a movement of funds or assets from a qualified plan (i.e., 401k, 403b, 457) to an IRA. To roll funds from a qualified plan to an IRA, you must have a triggering event. The most common triggering events are termination of employment or the plan. Rollovers are initiated through your current administrator. It is best to complete your administrator's "Direct Rollover" form. This form is where you will instruct them to send the funds directly to Midland Trust Company. Doing a direct rollover avoids a required federal withholding.
A contribution is non-qualified (personal) cash that an individual adds to their account. Please note that eligibility requirements (like earned income) and annual contribution limits apply. Contribution limits are based on the account type.
Once we receive the funds, we will send you an email. You can check the status of your transfer by visiting your Midland360 client portal.
Step 3 – Start Investing
A member of our client services team will be reaching out to you to welcome you to Midland. They will discuss your investment intentions and arrange to have investment documents approved. They will also record a verbal verification of your upcoming transaction.
Midland360 Client Portal
If you need something, your Midland360 client portal is the best place to go. With Midland360, you can
- Access account balances
- Make contributions
- Make distributions
- Pay bills associated with investments held in your account
- Manage your contact information
- View account alerts
- Access transaction documents
- See IRS filings
- Access quarterly and year-end statements
Asset market values and statements on Midland360 are only as accurate as the information provided to us. Many clients choose to update asset values yearly on December 31st.
Midland Pay (For Real Estate and Private Lenders)
Midland Pay is an essential tool for real estate investors' tenants and private lending borrowers!
If your account owns real estate or lends money, you can expect regular payments from your tenant or borrower. Payments need to flow directly to your account. You could jeopardize the tax status of your plan if you accept payments personally on behalf of your account. To make these payments to your account easy, Midland has set up a payment portal. This means:
- Checks will not get lost in the mail
- No delays or worrying about payments being late
- No need to remember to send payment with the recurring payment option
- Ensuring payments go to your account to maintain your tax-advantaged status
Please contact (239) 333-1032 to set up account payments via the payment portal.
Midland is not an asset manager or loan servicer. Midland performs tax reporting and recordkeeping services for the assets in your account. We do not monitor your account activity and performance. If your investment has expenses associated with it, you need to ensure you pay any bills related to the asset from your account. You may reimburse a non-disqualified asset manager from your account on an as-needed basis. You may request payment for any due expenses through your Midland360 client portal.
Privacy and Authorized Account Designations
At Midland, we take the protection of your information seriously. When you call for account-specific information, our representatives verify your identity. Doing this ensures we are not providing your information to an unauthorized party.
You may choose to have an authorized member on your account. These members can include a family member, a professional advisor, or another designated party. These members' access to your account has some notable differences laid out below.
- Midland’s Interested Party Designation allows another party to have query access to your account. The party will have full access to your account information but cannot complete transactions on your behalf.
- Midland’s Limited Power of Attorney allows another party full access to your account. They also have the ability to complete certain transactions on your behalf.
For more information on granting account access, contact Midland at (239) 333-1032.
Annual Fair Market Valuation
As the administrator of your account, Midland must receive an updated Fair Market Value (FMV) annually. We have to report the FMV to the IRS. If an asset's value is not readily known, Midland will contact clients or investment sponsors to obtain the year-end value. We do this between January and March each year. When you provide the asset’s current value, you must supply all supporting documentation to substantiate the value. Substantiation may include recent bank statements, appraisals, tax assessor values, professional opinion letters, or market comparisons. Supporting documentation cannot be more than 30 days old.
Midland assesses recordkeeping fees annually on the first business day of the month in which you opened your account. Midland bills you for non-recurring requests at the time they are processed. These requests can include new purchases, wire transfers, check fees, and overnight mail. For more details about which fees Midland assesses, please review your fee schedule.
Annual Tax Reporting
Midland reports distributions on IRS Form 1099-R in January of each year. If you have taken any distributions in the previous tax year, Midland mails you a copy of this form to the address on file. You can expect to receive this notice in the first week of February. Midland also files IRS Form 5498 every May. Form 5498 shows the prior year-end balance and any contributions or rollovers made to the account during the previous tax year. Both Forms will be available in the Documents section of your Midland360 client portal.
What Is a Prohibited Transaction?
According to IRS Publication 590, a prohibited transaction is any improper use of your IRA account by you, your beneficiary, or any disqualified person. Types of prohibited transactions include:
- Sale, exchange, or leasing of property between an IRA and a disqualified party
- Extension of credit or cash loan between an IRA and disqualified party
- Furnishing of goods, services, or facilities between an IRA and disqualified party
- Transfer of IRA income or assets to, or use by, or for the benefit of, a disqualified party (example: use of an IRA-owned property by the IRA owner or another disqualified party)
What Investments Are Not Permitted in an IRA Account?
The IRS does not provide a list of allowable investments for IRA accounts. Instead, they provide a list of prohibited investments. A self-directed IRA offers a wide range of investment options. But, the IRS does not allow investments in Life Insurance or Collectibles such as:
- Metals (certain Government minted gold/silver/palladium/platinum are permitted)
- Alcoholic beverages
What Are the Potential Consequences of a Prohibited Transaction?
Failure to follow the IRS's prohibited transaction regulations may lead to costly consequences. This could also jeopardize the tax status of your plan. Suppose there is a prohibited transaction in an IRA account at any time during the year. In that case, the account stops being an IRA as of the first day of that year. The account is treated as having distributed all its assets to the IRA owner at the fair market value on the first day of that year. Consult with your tax or legal advisor about what may be deemed prohibited before engaging your IRA in any transaction.
To learn more about prohibited transactions, view our Prohibited Transactions Guide for free.
The Midland umbrella of companies is a leading custodial services provider offering self-directed savings accounts, 1031 exchanges, and private fund custody services. Since 1994, Midland has focused on providing clients with as many opportunities as possible to defer or eliminate taxes and grow wealth.
Why Midland Trust Company Is Unique
Stock brokerages and banks dominate the retirement plan industry. They may provide satisfactory services, but they limit your investment choices to the products they sell. Brokerages and banks typically provide administrative/recordkeeping services at no cost to the consumer. They can do this because they recognize that they will generate revenue in other ways (commissions, management fees, or loans).
Midland’s business model is unique. Midland doesn’t sell investments, nor do we provide any legal, tax, or investment advice. Therefore, Midland charges administrative fees to provide required recordkeeping and tax reporting while giving our clients complete control of their investment decisions. We base our transparent fees on our administrative services, not on the performance of your investment.
Our Commitment to You
The Midland team delivers the highest level of service to you. We constantly push ourselves to find new ways to serve you better. Our advanced technologies and dedicated client services team are committed to making the self-direction process as easy as possible for you. Midland prides itself on being the most responsive company in our industry.
Midland Contact Information
|Office Phone||(239) 333-1032||Office Fax||(239) 466-5496||Office Hours||Monday - Thursday: 8:30 am - 5:00 pm ET
Friday: 8:30 am - 4:00 pm ET
|General Inbox||[email protected]||Mailing Address||PO Box 07520
Fort Myers, FL 33919