Company: RWT-PA
Filing Date: 2025-01-16
Form Type: 424B5
Source: 0001104659-25-004099
Chunk: 112

Company: REDWOOD TRUST INC
Filing Date: 2025-01-16
Form: 424B5
Chunk 112
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 rules applicable to partnerships.
If we or any of our subsidiary partnerships are subject to this interest expense limitation, our REIT taxable income for a taxable year
may be increased. Taxpayers that conduct certain real estate businesses may elect not to have this interest expense limitation apply
to them, provided that they use an alternative depreciation system to depreciate certain property. We do not believe that we or any of
our subsidiary partnerships will be eligible to make this election.

We generally must pay, or
be treated as paying, the distributions described above in the taxable year to which they relate. At our election, a distribution will
be treated as paid in a taxable year if it is declared before we timely file our tax return for such year and paid on or before the first
regular dividend payment after such declaration, provided such payment is made during the 12-month period following the close of such
year. These distributions are treated as received by our stockholders in the year in which they are paid. This is so even though these
distributions relate to the prior year for purposes of the 90% distribution requirement. In order to be taken into account for purposes
of our distribution requirement, except as provided below, the amount distributed must not be preferential — i.e., every stockholder
of the class of stock to which a distribution is made must be treated the same as every other stockholder of that class, and no class
of stock may be treated other than according to its dividend rights as a class. This preferential dividend limitation will not apply
to distributions made by us, provided we qualify as a “publicly offered REIT.” We believe that we are, and expect we will
continue to be, a “publicly offered REIT.” However, Subsidiary REITs we may own from time to time may not be publicly offered
REITs. To the extent that we do not distribute all of our net capital gain, or distribute at least 90%, but less than 100%, of our REIT
taxable income, as adjusted, we will be required to pay regular U.S. federal corporate income tax on the undistributed amount.

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We believe that we have made,
and we intend to continue to make, timely distributions sufficient to satisfy these annual distribution requirements and to minimize
our corporate tax obligations. However, from time to time, we may not have sufficient cash or other liquid assets to meet these distribution
requirements due to timing differences between