Company: RWT-PA
Filing Date: 2025-01-16
Form Type: 424B5
Source: 0001104659-25-004099
Chunk: 131

Company: REDWOOD TRUST INC
Filing Date: 2025-01-16
Form: 424B5
Chunk 131
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 such rules. If the redemption or repurchase
of shares is treated as a distribution, the amount of the distribution will be measured by the amount of cash and the fair market value
of any property received. See “Material U.S. Federal Income Tax Considerations—Federal Income Tax Considerations for Holders
of Our Capital Stock and Debt Securities—Taxation of Non-U.S. Holders of Our Capital Stock—Distributions Generally.”
If the redemption or repurchase of shares is not treated as a distribution, it will be treated as a taxable sale or exchange in the manner
described under “Material U.S. Federal Income Tax Considerations—Federal Income Tax Considerations for Holders of Our Capital
Stock and Debt Securities—Taxation of Non-U.S. Holders of Our Capital Stock—Sale of Our Capital Stock.”

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Taxation of Holders of Our Debt Securities

The following summary describes
the material U.S. federal income tax consequences of purchasing, owning and disposing of our debt securities. This discussion assumes
the debt securities will be issued with less than a statutory de minimis amount of original issue discount for U.S. federal income
tax purposes. In addition, this discussion is limited to persons purchasing the debt securities for cash at original issue and at their
original “issue price” within the meaning of Section 1273 of the Code (i.e., the first price at which a substantial
amount of the debt securities is sold to the public for cash).

U.S. Holders

Payments of Interest

Interest on a debt security
generally will be taxable to a U.S. Holder as ordinary income at the time such interest is received or accrued, in accordance with such
U.S. Holder’s method of accounting for U.S. federal income tax purposes.

Sale or Other Taxable Disposition

A U.S. Holder will recognize
gain or loss on the sale, exchange, redemption, retirement or other taxable disposition of a debt security. The amount of such gain or
loss generally will be equal to the difference between the amount received for the debt security in cash or other property valued at
fair market value (less amounts attributable to any accrued but unpaid interest, which will be taxable as interest to the extent not
previously included in income) and the U.S. Holder’s adjusted tax basis in the debt security. A U.S. Holder’s adjusted tax
basis in a debt security generally will be equal to the amount the U.S. Holder paid