Company: RWT-PA
Filing Date: 2025-03-03
Form Type: S-3ASR
Source: 0001104659-25-019828
Chunk: 44

Company: REDWOOD TRUST INC
Filing Date: 2025-03-03
Form: S-3ASR
Chunk 44
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 not subject to tax on unrelated business taxable income. To the extent that we own  
 a REMIC residual interest or a taxable mortgage pool through a taxable REIT subsidiary, or   
 a TRS, we will not be subject to this tax. See “Material U.S. Federal Income Tax             
 Considerations—Taxation of the Company—Taxable Mortgage Pools.”                              |

| · | Our                                                                                         
 subsidiaries that are C corporations and are not qualified REIT subsidiaries, including our 
 TRSs, generally will be required to pay regular U.S. federal corporate income tax on        
 their earnings.                                                                             |

| · | We                                                                                 
 will be required to pay a 100% tax on any “redetermined rents,” “redetermined      
 deductions,” “excess interest” or “redetermined TRS service income,”               
 as described below under “Material U.S. Federal Income Tax Considerations—Taxation 
 of the Company—Income Tests—Penalty Tax.”                                          |

| · | We                                                                                                  
 may elect to retain and pay income tax on our net capital gain. In that case, a stockholder         
 would include its proportionate share of our undistributed capital gain (to the extent we           
 make a timely designation of such gain to the stockholder) in its income, would be deemed           
 to have paid the tax that we paid on such gain, and would be allowed a credit for its proportionate 
 share of the tax deemed to have been paid, and an adjustment would be made to increase the          
 tax basis of the stockholder in our capital stock.                                                  |

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| · | If                                                                                               
 we fail to comply with the requirement to send annual letters to our stockholders holding        
 at least a certain percentage of our stock, as determined under applicable Treasury Regulations, 
 requesting information regarding the actual ownership of our stock, and the failure is not       
 due to reasonable cause or is due to willful neglect, we will be subject to a $25,000 penalty,   
 or if the failure is intentional, a $50,000 penalty.                                             |

We and our subsidiaries
may be subject to a variety of taxes other than U.S. federal income tax, including payroll taxes and state and local income, property
and other taxes on our assets and operations.

Requirements for Qualification as a REIT

The Code defines a REIT as a corporation,
trust or association:

| (1) | that                                             
 is managed by one or more trustees or directors; |

|