Company: RWT-PA
Filing Date: 2025-01-16
Form Type: 424B5
Source: 0001104659-25-004099
Chunk: 120

Company: REDWOOD TRUST INC
Filing Date: 2025-01-16
Form: 424B5
Chunk 120
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 as described in “Material U.S. Federal Income Tax Considerations—Federal Income Tax Considerations for Holders
of Our Capital Stock and Debt Securities—Taxation of Taxable U.S. Holders of Our Capital Stock—Tax Rates” below, as
investment income for purposes of computing the investment interest limitation, but in such case, the holder will be taxed at ordinary
income rates on such amount. Other distributions we make, to the extent they do not constitute a return of capital, generally will be
treated as investment income for purposes of computing the investment interest limitation.

Dispositions of Our Capital Stock

Except as described below
under “Material U.S. Federal Income Tax Considerations—Federal Income Tax Considerations for Holders of Our Capital Stock
and Debt Securities—Taxation of Taxable U.S. Holders of Our Capital Stock—Redemption or Repurchase by Us,” if a U.S.
Holder sells or disposes of shares of our capital stock, it will recognize gain or loss for U.S. federal income tax purposes in an amount
equal to the difference between the amount of cash and the fair market value of any property received on the sale or other disposition
and the U.S. Holder’s adjusted tax basis in the shares. This gain or loss, except as provided below, will be a long-term capital
gain or loss if the U.S. Holder has held such capital stock for more than one year. However, if a U.S. Holder recognizes a loss upon
the sale or other disposition of our capital stock that it has held for six months or less, after applying certain holding period rules,
the loss recognized will be treated as a long-term capital loss to the extent the U.S. Holder received distributions from us which were
required to be treated as long-term capital gains. The deductibility of capital losses is subject to limitations.

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Redemption or Repurchase by Us

A redemption or repurchase
of shares of our capital stock will be treated under Section 302 of the Code as a distribution (and taxable as a dividend to the
extent of our current and accumulated earnings and profits as described above under “Material U.S. Federal Income Tax Considerations—Federal
Income Tax Considerations for Holders of Our Capital Stock and Debt Securities—Taxation of Taxable U.S. Holders of Our Capital
Stock—Distributions Generally”) unless the redemption or repurchase satisfies one of the tests set forth in Section 302(b) of