Company: RWT-PA
Filing Date: 2025-01-15
Form Type: 424B5
Source: 0001104659-25-003632
Chunk: 113

Company: REDWOOD TRUST INC
Filing Date: 2025-01-15
Form: 424B5
Chunk 113
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 to our stockholders and all distributions to our stockholders will be taxable as regular
corporate dividends to the extent of our current and accumulated earnings and profits. In such event, corporate stockholders may be eligible
for the dividends-received deduction. In addition, non-corporate stockholders, including individuals, may be eligible for the preferential
tax rates on qualified dividend income. Non-corporate stockholders, including individuals, generally may deduct up to 20% of dividends
from a REIT, other than capital gain dividends and dividends treated as qualified dividend income, for taxable years beginning before
January 1, 2026 for purposes of determining their U.S. federal income tax (but not for purposes of the 3.8% Medicare tax), subject
to certain holding period requirements and other limitations. If we fail to qualify as a REIT, such stockholders may not claim this deduction
with respect to dividends paid by us. Unless entitled to relief under specific statutory provisions, we would also be ineligible to elect
to be treated as a REIT for the four taxable years following the year for which we lose our qualification. It is not possible to state
whether in all circumstances we would be entitled to this statutory relief.

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Federal Income Tax Considerations for Holders of Our Capital Stock and Debt Securities

The following discussion
is a summary of the material U.S. federal income tax consequences to you of purchasing, owning and disposing of our capital stock or
debt securities. This discussion is limited to holders who hold our capital stock or debt securities as “capital assets”
within the meaning of Section 1221 of the Code (generally, property held for investment). This discussion does not address all U.S.
federal income tax consequences relevant to a holder’s particular circumstances, including the alternative minimum tax. In addition,
except where specifically noted, it does not address consequences relevant to holders subject to special rules, including, without limitation:

| · | U.S. expatriates                                                 
 and former citizens or long-term residents of the United States; |

| · | U.S. Holders                                                         
 (as defined below) whose functional currency is not the U.S. dollar; |

| · | persons holding                                                                                                                           
 our capital stock or debt securities as part of a hedge, straddle or other risk reduction strategy or as part of a conversion transaction 
 or other integrated investment;                                                                                                           |

| · | banks, insurance                             
 companies, and other financial