Company: RWT-PA
Filing Date: 2025-08-22
Form Type: 424B5
Source: 0001104659-25-081925
Chunk: 95

Company: REDWOOD TRUST INC
Filing Date: 2025-08-22
Form: 424B5
Chunk 95
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 by the amount of the bond premium used to offset interest income as set forth above. An election to amortize bond premium applies to all taxable debt obligations held or subsequently acquired by the U.S. Holder on or after the first day of the first taxable year to which the election applies and may be revoked only with the consent of the IRS.

Market Discount

A U.S. Holder will be treated as having purchased a note with market discount to the extent the adjusted issue price of the note as of the acquisition date (which will be determined by reference to the issue price of the initial notes) exceeds the purchase price of the note (excluding any amount treated as paid for pre-acquisition accrued interest), unless such excess is less than 0.25% of the principal amount of the note multiplied by the number of complete years remaining until the note’s maturity date. A U.S. Holder that acquires a note with market discount will be required to treat any gain recognized on the disposition (including certain non-taxable dispositions) of the note as ordinary income (rather than capital gain) to the extent of any accrued market discount, unless the U.S. Holder has elected to include market discount in income as it accrues as discussed below. A U.S. Holder that does not elect to include market discount in income currently may be required to defer, until the maturity of the note or the earlier disposition (including certain non-taxable dispositions) of the note, the deduction of all or a portion of the interest expense on any indebtedness incurred or maintained to purchase or carry such note.

If a U.S. Holder elects to accrue market discount currently, the holder’s adjusted tax basis in a note will be increased by the amount of any accrued market discount included in income with respect to such note. The election to include market discount in income currently, once made, will also apply to all market discount obligations acquired by such holder in or after the first taxable year to which the election applies and may not be revoked without the consent of the IRS.

Market discount will accrue ratably during the period from the date of acquisition to the maturity date of a note unless a U.S. Holder makes an election to accrue on a constant yield method. This election applies only to the note with respect to which it is made and is irrevocable. U.S. Holders are urged to consult their tax advisors about the application of the market discount rules to their particular situations.

Additional Payments

In certain circumstances, we may be obligated to make payments