Company: RWT-PA
Filing Date: 2025-01-15
Form Type: 424B5
Source: 0001104659-25-003632
Chunk: 130

Company: REDWOOD TRUST INC
Filing Date: 2025-01-15
Form: 424B5
Chunk 130
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 tax consequences of purchasing, owning and disposing of our debt securities. This discussion assumes
the debt securities will be issued with less than a statutory de minimis amount of original issue discount for U.S. federal income
tax purposes. In addition, this discussion is limited to persons purchasing the debt securities for cash at original issue and at their
original “issue price” within the meaning of Section 1273 of the Code (i.e., the first price at which a substantial
amount of the debt securities is sold to the public for cash).

U.S. Holders

Payments of Interest

Interest on a debt security
generally will be taxable to a U.S. Holder as ordinary income at the time such interest is received or accrued, in accordance with such
U.S. Holder’s method of accounting for U.S. federal income tax purposes.

Sale or Other Taxable Disposition

A U.S. Holder will recognize
gain or loss on the sale, exchange, redemption, retirement or other taxable disposition of a debt security. The amount of such gain or
loss generally will be equal to the difference between the amount received for the debt security in cash or other property valued at
fair market value (less amounts attributable to any accrued but unpaid interest, which will be taxable as interest to the extent not
previously included in income) and the U.S. Holder’s adjusted tax basis in the debt security. A U.S. Holder’s adjusted tax
basis in a debt security generally will be equal to the amount the U.S. Holder paid for the debt security. Any gain or loss generally
will be capital gain or loss, and will be long-term capital gain or loss if the U.S. Holder has held the debt security for more than
one year at the time of such sale or other taxable disposition. Otherwise, such gain or loss will be short-term capital gain or loss.
Long-term capital gains recognized by certain non-corporate U.S. Holders, including individuals, generally will be taxable at reduced
rates. The deductibility of capital losses is subject to limitations.

Non-U.S. Holders

Payments of Interest

Interest paid on a debt security
to a Non-U.S. Holder that is not effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United
States generally will not be subject to U.S. federal income tax, or withholding tax, provided that:

| · | the Non-U.S.                                                                                                                        
 Holder does not, actually or constructively, own