Company: RWT-PA
Filing Date: 2025-03-03
Form Type: S-3ASR
Source: 0001104659-25-019828
Chunk: 86

Company: REDWOOD TRUST INC
Filing Date: 2025-03-03
Form: S-3ASR
Chunk 86
---
 capital stock will be treated under Section 302 of the Code as a distribution (and taxable as a dividend to the
extent of our current and accumulated earnings and profits) unless the redemption or repurchase satisfies one of the tests set forth
in Section 302(b) of the Code and is therefore treated as a sale or exchange of the redeemed or repurchased shares. See “Material
U.S. Federal Income Tax Considerations—Federal Income Tax Considerations for Holders of Our Capital Stock and Debt Securities—Taxation
of Taxable U.S. Holders of Our Capital Stock—Redemption or Repurchase by Us.” Qualified shareholders and their owners
may be subject to different rules, and should consult their tax advisors regarding the application of such rules. If the redemption or
repurchase of shares is treated as a distribution, the amount of the distribution will be measured by the amount of cash and the fair
market value of any property received. See “Material U.S. Federal Income Tax Considerations—Federal Income Tax Considerations
for Holders of Our Capital Stock and Debt Securities—Taxation of Non-U.S. Holders of Our Capital Stock—Distributions
Generally” above. If the redemption or repurchase of shares is not treated as a distribution, it will be treated as a taxable sale
or exchange in the manner described above under “Material U.S. Federal Income Tax Considerations—Federal Income Tax
Considerations for Holders of Our Capital Stock and Debt Securities—Taxation of Non-U.S. Holders of Our Capital Stock—Sale
of Our Capital Stock.”

Taxation of Holders of Our Debt Securities

The following summary describes
certain material U.S. federal income tax consequences of purchasing, owning and disposing of our debt securities. This discussion
assumes the debt securities will be issued with less than a statutory de minimis amount of original issue discount for U.S. federal
income tax purposes. In addition, this discussion is limited to persons purchasing the debt securities for cash at original issue and
at their original “issue price” within the meaning of Section 1273 of the Code (i.e., the first price at which a substantial
amount of the debt securities is sold to the public for cash).

U.S. Holders

Payments of Interest

Interest on a debt security
generally will be taxable to a U.S. Holder as ordinary income at the time such interest is received or accrued, in accordance with
such U.S. Holder’s method of accounting for U.S