Company: RWT-PA
Filing Date: 2025-03-03
Form Type: S-3ASR
Source: 0001104659-25-019828
Chunk: 70

Company: REDWOOD TRUST INC
Filing Date: 2025-03-03
Form: S-3ASR
Chunk 70
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 This discussion is limited to holders who hold our capital stock or debt securities as “capital assets”
within the meaning of Section 1221 of the Code (generally, property held for investment). This discussion does not address all U.S. federal
income tax consequences relevant to a holder’s particular circumstances, including the alternative minimum tax. In addition, except
where specifically noted, it does not address consequences relevant to holders subject to special rules, including, without limitation:

| · | U.S. expatriates                                                 
 and former citizens or long-term residents of the United States; |

| · | U.S. Holders                                                         
 (as defined below) whose functional currency is not the U.S. dollar; |

| · | persons                                                                                           
 holding our capital stock or debt securities as part of a hedge, straddle or other risk reduction 
 strategy or as part of a conversion transaction or other integrated investment;                   |

| · | banks,                                                 
 insurance companies, and other financial institutions; |

| · | REITs                              
 or regulated investment companies; |

| · | brokers,                          
 dealers or traders in securities; |

| · | “controlled                                                                     
 foreign corporations,” “passive foreign investment companies,” and corporations 
 that accumulate earnings to avoid U.S. federal income tax;                      |

| · | S                                                                                        
 corporations, partnerships or other entities or arrangements treated as partnerships for 
 U.S. federal income tax purposes (and investors therein);                                |

| · | tax-exempt                                   
 organizations or governmental organizations; |

| · | persons                                                                                      
 subject to special tax accounting rules as a result of any item of gross income with respect 
 to our capital stock or debt securities being taken into account in an “applicable           
 financial statement” (as defined in the Code);                                               |

| · | persons                                                                                    
 deemed to sell our capital stock or debt securities under the constructive sale provisions 
 of the Code;                                                                               |

| · | tax-qualified         
 retirement plans; and |

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| · | persons                                                                                     
 who hold or receive our capital stock pursuant to the exercise of any employee stock option 
 or otherwise as compensation.                                                               |

THIS DISCUSSION IS FOR INFORMATIONAL
PURPOSES ONLY AND IS NOT INTENDED AS TAX ADVICE. INVESTORS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE APPLICATION OF THE U.S. FEDERAL
INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES OF THE PURCHASE