Company: RWT-PA
Filing Date: 2025-01-15
Form Type: 424B5
Source: 0001104659-25-003632
Chunk: 127

Company: REDWOOD TRUST INC
Filing Date: 2025-01-15
Form: 424B5
Chunk 127
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 States persons, subject to certain rules. For
purposes of determining whether a REIT is a “domestically controlled qualified investment entity,” a person who at all applicable
times holds less than 5% of a class of stock that is “regularly traded” is treated as a United States person unless the REIT
has actual knowledge that such person is not a United States person. Although we believe that we are a “domestically controlled
qualified investment entity,” because our common stock is (and, we anticipate, will continue to be) publicly traded, we cannot
make any assurance that we will remain a “domestically controlled qualified investment entity.”

Even if we were a USRPHC
and we do not qualify as a “domestically controlled qualified investment entity” at the time a Non-U.S. Holder sells our
capital stock, gain realized from the sale or other taxable disposition by a Non-U.S. Holder of such capital stock would not be subject
to U.S. federal income tax under FIRPTA as a sale of a USRPI if:

| (1) | such class                                                                                                               
 of stock is “regularly traded,” as defined by applicable Treasury Regulations, on an established securities market, such 
 as the New York Stock Exchange, and                                                                                      |

| (2) | such Non-U.S.                                                                                                                       
 Holder owned, actually and constructively, 10% or less of such class of stock throughout the shorter of the five-year period ending 
 on the date of the sale or other taxable disposition or the Non-U.S. Holder’s holding period.                                       |

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In addition, dispositions
of our capital stock by 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, dispositions of
our capital stock by “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.

Notwithstanding the foregoing,
gain from the sale, exchange or other taxable disposition of our capital stock not otherwise subject to FIRPTA will be taxable to a Non-U.S.
Holder if either (a) the investment in our capital stock is treated as effectively connected with the conduct by the Non-U