Company: RWT-PA
Filing Date: 2025-01-16
Form Type: 424B5
Source: 0001104659-25-004099
Chunk: 127

Company: REDWOOD TRUST INC
Filing Date: 2025-01-16
Form: 424B5
Chunk 127
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 Instead, such distributions generally will be treated
as ordinary dividend distributions and subject to withholding in the manner described above with respect to ordinary dividends. In addition,
distributions to certain non-U.S. publicly traded shareholders that meet certain record-keeping and other requirements, or 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, distributions to “qualified foreign pension funds”
or entities all of the interests of which are held by “qualified foreign pension funds” are exempt from FIRPTA. Non-U.S.
Holders should consult their tax advisors regarding the application of these rules.

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Retention of Net Capital Gains

Although the law is not clear
on the matter, it appears that amounts we designate as retained net capital gains in respect of our capital stock should be treated with
respect to Non-U.S. Holders as actual distributions of capital gain dividends. Under this approach, the Non-U.S. Holders may be able
to offset as a credit against their U.S. federal income tax liability their proportionate share of the tax that we paid on such retained
net capital gains and to receive from the IRS a refund to the extent their proportionate share of such tax that we paid exceeds their
actual U.S. federal income tax liability. If we were to designate any portion of our net capital gain as retained net capital gain, Non-U.S.
Holders should consult their tax advisors regarding the taxation of such retained net capital gain.

Sale 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 Non-U.S. Holders of Our Capital Stock—Redemption or Repurchase by Us,” gain realized
by a Non-U.S. Holder upon the sale, exchange or other taxable disposition of our capital stock generally will not be subject to U.S.
federal income tax unless such stock constitutes a USRPI. In general, stock of a domestic corporation that constitutes a “United
States real property holding corporation”, or a “USRPHC”, will constitute a USRPI unless certain exceptions apply.
A domestic corporation will constitute a USRPHC if 50% or more of the corporation’s assets on any of certain testing dates during
a prescribed testing period consist