Company: RWT-PA
Filing Date: 2025-01-15
Form Type: 424B5
Source: 0001104659-25-003632
Chunk: 117

Company: REDWOOD TRUST INC
Filing Date: 2025-01-15
Form: 424B5
Chunk 117
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 in such capital stock equal to the amount of cash that could have been received instead
of such capital stock as described above, and has a holding period in such capital stock that begins on the day immediately following
the payment date for the distribution.

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Capital Gain Dividends

Dividends that we properly
designate as capital gain dividends will be taxable to our taxable U.S. Holders as a gain from the sale or disposition of a capital asset
held for more than one year, to the extent that such gain does not exceed our actual net capital gain for the taxable year and may not
exceed our dividends paid for the taxable year, including dividends paid the following year that are treated as paid in the current year.
U.S. Holders that are corporations may, however, be required to treat up to 20% of certain capital gain dividends as ordinary income.
If we properly designate any portion of a dividend as a capital gain dividend, then, except as otherwise required by law, we presently
intend to allocate a portion of the total capital gain dividends paid or made available to holders of all classes of our capital stock
for the year to the holders of each class of our capital stock in proportion to the amount that our total dividends, as determined for
U.S. federal income tax purposes, paid or made available to the holders of each such class of our capital stock for the year bears to
the total dividends, as determined for U.S. federal income tax purposes, paid or made available to holders of all classes of our capital
stock for the year. In addition, except as otherwise required by law, we will make a similar allocation with respect to any undistributed
long-term capital gains which are to be included in the long-term capital gains of our stockholders, based on the allocation of the capital
gain amount which would have resulted if those undistributed long-term capital gains had been distributed as “capital gain dividends”
by us to our stockholders.

Retention of Net Capital Gains

We may elect to retain, rather
than distribute as a capital gain dividend, all or a portion of our net capital gains. If we make this election, we would pay tax on
our retained net capital gains. In addition, to the extent we so elect, our earnings and profits (determined for U.S. federal income
tax purposes) would be adjusted accordingly, and a U.S. Holder generally would:

| · | include its                                                                                                                           
 pro rata