Company: RWT-PA
Filing Date: 2025-01-15
Form Type: 424B5
Source: 0001104659-25-003632
Chunk: 124

Company: REDWOOD TRUST INC
Filing Date: 2025-01-15
Form: 424B5
Chunk 124
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shares. To the extent that such distributions exceed the Non-U.S. Holder’s adjusted tax basis in such shares, they will generally
give rise to gain from the sale or exchange of such shares, the tax treatment of which is described below. However, such excess distributions
may be treated as dividend income for certain Non-U.S. Holders. For withholding purposes, we expect to treat all distributions as made
out of our current or accumulated earnings and profits. However, amounts withheld may be refundable if it is subsequently determined
that the distribution was, in fact, in excess of our current and accumulated earnings and profits, provided that certain conditions are
met.

Capital Gain Dividends and Distributions Attributable to a Sale or Exchange of United States Real Property Interests

Distributions to a Non-U.S.
Holder that we properly designate as capital gain dividends, other than those arising from the disposition of a USRPI, generally should
not be subject to U.S. federal income taxation, unless:

| · | the investment                                                                                                                         
 in our capital stock is treated as effectively connected with the conduct by the Non-U.S. Holder of a trade or business within the     
 United States (and, if required by an applicable income tax treaty, the Non-U.S. Holder maintains a permanent establishment in the     
 United States to which such dividends are attributable), in which case the Non-U.S. Holder will be subject to the same treatment       
 as U.S. Holders with respect to such gain, except that a Non-U.S. Holder that is a corporation may also be subject to a branch profits 
 tax of up to 30%, as discussed above; or                                                                                               |

| · | the Non-U.S.                                                                                                                            
 Holder is a nonresident alien individual who is present in the United States for 183 days or more during the taxable year and certain   
 other conditions are met, in which case the Non-U.S. Holder will be subject to U.S. federal income tax at a rate of 30% on the Non-U.S. 
 Holder’s capital gains (or such lower rate specified by an applicable income tax treaty), which may be offset by U.S. source            
 capital losses of such Non-U.S. Holder (even though the individual is not considered a resident of the United States), provided the     
 Non-U.S. Holder has timely filed U.S. federal income tax returns with respect to such losses.                                           |

Pursuant to the Foreign Investment
in Real Property Tax Act, or FIRPT