Company: RWT-PA
Filing Date: 2025-01-15
Form Type: 424B5
Source: 0001104659-25-003632
Chunk: 89

Company: REDWOOD TRUST INC
Filing Date: 2025-01-15
Form: 424B5
Chunk 89
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 of our
shares that are intended to assist us in continuing to satisfy the share ownership requirements described in conditions (5) and
(6) above. A description of the share ownership and transfer restrictions relating to our capital stock is contained in the discussion
in this prospectus under the heading “Restrictions on Ownership and Transfer and Repurchase of Shares.” These restrictions,
however, do not ensure that we have previously satisfied, and may not ensure that we will, in all cases, be able to continue to satisfy,
the share ownership requirements described in conditions (5) and (6) above. If we fail to satisfy these share ownership requirements,
then except as provided in the next sentence, our status as a REIT will terminate. If, however, we comply with the rules contained
in applicable Treasury Regulations that require us to ascertain the actual ownership of our shares and we do not know, or would not have
known through the exercise of reasonable diligence, that we failed to meet the requirement described in condition (6) above, we
will be treated as having met this requirement. See “Material U.S. Federal Income Tax Considerations—Taxation of the Company—Failure
to Qualify.”

In addition, we may not maintain
our status as a REIT unless our taxable year is the calendar year. We have and will continue to have a calendar taxable year.

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Ownership of Interests in Partnerships, Limited Liability Companies and Qualified REIT Subsidiaries

In the case of a REIT that
is a partner in a partnership (for purposes of this discussion, references to “partnership” include a limited liability company
treated as a partnership for U.S. federal income tax purposes, and references to “partner” include a member in such a limited
liability company), Treasury Regulations provide that the REIT will be deemed to own its proportionate share of the assets of the partnership
based on its interest in partnership capital, subject to special rules relating to the 10% asset test described below. Also, the
REIT will be deemed to be entitled to its proportionate share of the income of that entity. The assets and gross income of the partnership
retain the same character in the hands of the REIT for purposes of Section 856 of the Code, including satisfying the gross income
tests and the asset tests. Thus, our pro rata share of the assets and items of income of any partnership, including such partnership’s
share of these items