Company: RWT-PA
Filing Date: 2025-01-16
Form Type: 424B5
Source: 0001104659-25-004099
Chunk: 117

Company: REDWOOD TRUST INC
Filing Date: 2025-01-16
Form: 424B5
Chunk 117
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 Stock and Debt Securities—Taxation of Taxable U.S. Holders of Our Capital Stock—Tax
Rates” below. As long as we qualify as a REIT, these distributions will not be eligible for the dividends-received deduction in
the case of U.S. Holders that are corporations or, except to the extent 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, the preferential rates on qualified dividend income applicable to non-corporate U.S. Holders, including
individuals. For purposes of determining whether distributions to holders of our capital stock are out of our current or accumulated
earnings and profits, our earnings and profits will be allocated first to our outstanding preferred stock, if any, and then to our outstanding
common stock.

To the extent that we make
distributions on our capital stock in excess of our current and accumulated earnings and profits allocable to such stock, these distributions
will be treated first as a tax-free return of capital to a U.S. Holder to the extent of the U.S. Holder’s adjusted tax basis in
such shares of stock. This treatment will reduce the U.S. Holder’s adjusted tax basis in such shares of stock by such amount, but
not below zero. Distributions in excess of our current and accumulated earnings and profits and in excess of a U.S. Holder’s adjusted
tax basis in its shares will be taxable as capital gain. Such gain will be taxable as long-term capital gain if the shares have been
held for more than one year. Dividends we declare in October, November, or December of any year and which are payable to a holder
of record on a specified date in any of these months will be treated as both paid by us and received by the holder on December 31
of that year, provided we actually pay the dividend on or before January 31 of the following year. U.S. Holders may not include
in their own income tax returns any of our net operating losses or capital losses.

U.S. Holders that receive
taxable stock distributions, including distributions partially payable in our capital stock and partially payable in cash, would be required
to include the full amount of the distribution (i.e., the cash and the stock portion) as a dividend (subject to limited exceptions) to
the extent of