Company: RWT-PA
Filing Date: 2025-03-03
Form Type: S-3ASR
Source: 0001104659-25-019828
Chunk: 72

Company: REDWOOD TRUST INC
Filing Date: 2025-03-03
Form: S-3ASR
Chunk 72
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. See “Material U.S. Federal Income Tax Considerations—Federal
Income Tax Considerations for Holders of Our Capital Stock and Debt Securities—Taxation of Taxable U.S. Holders of Our Capital
Stock—Tax Rates” below. As long as we qualify as a REIT, these distributions will not be eligible for the dividends-received
deduction in the case of U.S. Holders that are corporations or, except to the extent described in “Material U.S. Federal
Income Tax Considerations—Federal Income Tax Considerations for Holders of Our Capital Stock and Debt Securities—Taxation
of Taxable U.S. Holders of Our Capital Stock—Tax Rates” below, the preferential rates on qualified dividend income applicable
to non-corporate U.S. Holders, including individuals. For purposes of determining whether distributions to holders of our capital
stock are out of our current or accumulated earnings and profits, our earnings and profits will be allocated first to our outstanding
preferred stock, if any, and then to our outstanding common stock.

To the extent that we make
distributions on our capital stock in excess of our current and accumulated earnings and profits allocable to such stock, these distributions
will be treated first as a tax-free return of capital to a U.S. Holder to the extent of the U.S. Holder’s adjusted tax
basis in such shares of stock. This treatment will reduce the U.S. Holder’s adjusted tax basis in such shares of stock by
such amount, but not below zero. Distributions in excess of our current and accumulated earnings and profits and in excess of a U.S. Holder’s
adjusted tax basis in its shares will be taxable as capital gain. Such gain will be taxable as long-term capital gain if the shares have
been held for more than one year. Dividends we declare in October, November, or December of any year and which are payable to a holder
of record on a specified date in any of these months will be treated as both paid by us and received by the holder on December 31
of that year, provided we actually pay the dividend on or before January 31 of the following year. U.S. Holders may not include
in their own income tax returns any of our net operating losses or capital losses.

<div align='center'>44</div>

U.S. Holders that receive
taxable stock distributions, including distributions partially payable in our capital stock and partially payable in cash, would be required