Company: RWT-PA
Filing Date: 2025-03-03
Form Type: S-3ASR
Source: 0001104659-25-019828
Chunk: 84

Company: REDWOOD TRUST INC
Filing Date: 2025-03-03
Form: S-3ASR
Chunk 84
---
 controlled qualified investment entity” at the time a Non-U.S. Holder sells
our capital stock, gain realized from the sale or other taxable disposition by a Non-U.S. Holder of such capital stock would not
be subject to U.S. federal income tax under FIRPTA as a sale of a USRPI if:

| (1) | such                                                                                 
 class of stock is “regularly traded,” as defined by applicable Treasury Regulations, 
 on an established securities market, such as the NYSE, and                           |

| (2) | such                                                                                           
 Non-U.S. Holder owned, actually and constructively, 10% or less of such class of stock         
 throughout the shorter of the five-year period ending on the date of the sale or other taxable 
 disposition or the Non-U.S. Holder’s holding period.                                           |

In addition, dispositions
of our capital stock by 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, dispositions of
our capital stock by certain “qualified foreign pension funds” or entities all of the interests of which are held by such
“qualified foreign pension funds” are exempt from FIRPTA. Non-U.S. Holders should consult their tax advisors regarding
the application of these rules.

Notwithstanding the foregoing,
gain from the sale, exchange or other taxable disposition of our capital stock not otherwise subject to FIRPTA will be taxable to a Non-U.S. Holder
if either (a) the investment in our capital stock is treated as effectively connected with the conduct by the Non-U.S. Holder of
a trade or business within the United States (and, if required by an applicable income tax treaty, the Non-U.S. Holder maintains
a permanent establishment in the United States to which such gain is attributable), in which case the Non-U.S. Holder will be subject
to the same treatment as U.S. Holders with respect to such gain, except that a Non-U.S. Holder that is a corporation may also
be subject to the 30% branch profits tax (or such lower rate as may be specified by an applicable income tax treaty) on such gain, as
adjusted for certain items, or (b) the Non-U.S. Holder is a nonresident alien individual who is present in the United States for
183 days or more during the taxable year and certain other conditions are met