Company: RWT-PA
Filing Date: 2025-01-15
Form Type: 424B5
Source: 0001104659-25-003632
Chunk: 125

Company: REDWOOD TRUST INC
Filing Date: 2025-01-15
Form: 424B5
Chunk 125
---
A, distributions to a Non-U.S. Holder that are attributable to gain from sales or exchanges by us of
USRPIs, whether or not designated as capital gain dividends, will cause the Non-U.S. Holder to be treated as recognizing such gain as
income effectively connected with a U.S. trade or business. Non-U.S. Holders generally would be taxed at the regular rates applicable
to U.S. Holders, subject to any applicable alternative minimum tax and a special alternative minimum tax in the case of nonresident alien
individuals. We also will be required to withhold and to remit to the IRS 21% of any distribution to Non-U.S. Holders attributable to
gain from sales or exchanges by us of USRPIs. Distributions subject to FIRPTA may also be subject to a 30% branch profits tax in the
hands of a Non-U.S. Holder that is a corporation. The amount withheld is creditable against the Non-U.S. Holder’s U.S. federal
income tax liability. However, any distribution with respect to any class of stock that is “regularly traded,” as defined
by applicable Treasury Regulations, on an established securities market located in the United States is not subject to FIRPTA, and therefore,
not subject to the 21% U.S. withholding tax described above, if the Non-U.S. Holder did not own more than 10% of such class of stock
at any time during the one-year period ending on the date of the distribution. Instead, such distributions generally will be treated
as ordinary dividend distributions and subject to withholding in the manner described above with respect to ordinary dividends. In addition,
distributions to certain non-U.S. publicly traded shareholders that meet certain record-keeping and other requirements, or qualified
shareholders, are exempt from FIRPTA, except to the extent owners of such qualified shareholders that are not also qualified shareholders
own, actually or constructively, more than 10% of our capital stock. Furthermore, distributions to “qualified foreign pension funds”
or entities all of the interests of which are held by “qualified foreign pension funds” are exempt from FIRPTA. Non-U.S.
Holders should consult their tax advisors regarding the application of these rules.

<div align='center'>46</div>

Retention of Net Capital Gains

Although the law is not clear
on the matter, it appears that amounts we designate as retained net capital gains in respect of our capital stock should be treated with
respect