Company: RWT-PA
Filing Date: 2025-01-15
Form Type: 424B5
Source: 0001104659-25-003632
Chunk: 88

Company: REDWOOD TRUST INC
Filing Date: 2025-01-15
Form: 424B5
Chunk 88
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 $25,000 penalty, or if the failure is intentional, 
 a $50,000 penalty.                                                                                                                      |

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We and our subsidiaries may
be subject to a variety of taxes other than U.S. federal income tax, including payroll taxes and state and local income, property and
other taxes on our assets and operations.

Requirements for Qualification as a REIT

The Code defines a REIT as
a corporation, trust or association:

| (1) | that is managed by one or more trustees 
 or directors;                           |

| (2) | that issues                                                                            
 transferable shares or transferable certificates to evidence its beneficial ownership; |

| (3) | that would                                                                          
 be taxable as a domestic corporation, but for Sections 856 through 860 of the Code; |

| (4) | that is not                                                                                           
 a financial institution or an insurance company within the meaning of certain provisions of the Code; |

| (5) | that is beneficially          
 owned by 100 or more persons; |

| (6) | not more than                                                                                                                        
 50% in value of the outstanding stock of which is owned, actually or constructively, by five or fewer individuals, including certain 
 specified entities, during the last half of each taxable year; and                                                                   |

| (7) | that meets                                                                                                       
 other tests, described below, regarding the nature of its income and assets and the amount of its distributions. |

The Code provides that conditions
(1) to (4), inclusive, must be met during the entire taxable year and that condition (5) must be met during at least 335 days
of a taxable year of 12 months, or during a proportionate part of a taxable year of less than 12 months. Conditions (5) and (6) do
not apply until after the first taxable year for which an election is made to be taxed as a REIT. For purposes of condition (6), the
term “individual” includes a supplemental unemployment compensation benefit plan, a private foundation or a portion of a
trust permanently set aside or used exclusively for charitable purposes, but generally does not include a qualified pension plan or profit
sharing trust.

We believe that we have been
organized and have operated in a manner that has allowed us, and will continue to allow us, to satisfy conditions (1) through (7),
inclusive, during the relevant time periods. In addition, our charter provides for restrictions regarding ownership and transfer