Company: ADAMM
Filing Date: 2025-01-10
Form Type: 424B5
Source: 0001104659-25-002551
Chunk: 39

Company: ADAMAS TRUST, INC.
Filing Date: 2025-01-10
Form: 424B5
Chunk 39
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 in which event we would fail to qualify as a REIT unless we could avail ourself of certain relief provisions. We have made a protective TRS election with respect to our subsidiary REIT. If the IRS respects our protective TRS election with respect to such subsidiary REIT, the failure of such subsidiary REIT to qualify as a REIT would only cause us to fail to qualify as a REIT to the extent that the total value of interests in TRSs represent more than 20% of our assets. See “Material U.S. Federal Income Tax Considerations — Requirements for Qualification — Asset Tests” in the accompanying prospectus.

#### Taxable Mortgage Pools
. As discussed in the accompanying prospectus under “Material U.S. Federal Income Tax Considerations — Requirements for Qualification — Organizational Requirements — Taxable Mortgage Pools,” if a REIT is a taxable mortgage pool (“TMP”), or if a REIT owns a qualified REIT subsidiary that is a TMP, then a portion of the REIT’s income will be treated as “excess inclusion income” and a portion of the dividends the REIT pays to its stockholders will be considered to be excess inclusion income. In addition, although the law is unclear, the IRS has taken the position that a REIT is taxable at the highest U.S. federal corporate income tax rate on the portion of any excess inclusion income that it derives from an equity interest in a TMP equal to the percentage of its stock that is held in record name by “disqualified organizations.” Our subsidiary REIT currently owns an interest in a TMP. The ownership of our subsidiary REIT is structured such that no excess inclusion income should be allocated to the Company or its shareholders; rather the tax liability on the related excess inclusion income is to be borne by a TRS of the Company. We will indirectly bear such tax economically as the shareholder of such TRS.

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TABLE OF CONTENTS

#### Excess Mortgage Servicing Spreads
**. We intend to invest in excess mortgage servicing spreads, also known as “Excess MSRs.” The IRS has issued private letter rulings to other REITs holding that Excess MSRs are qualifying assets for purposes of the 75% asset test and produce qualifying income for purposes of the 75% gross income test. Any income that is qualifying income for the 75% gross income test is also qualifying income for the 95% gross income test. A private letter ruling may be relied upon only