Company: RWT-PA
Filing Date: 2025-03-03
Form Type: S-3ASR
Source: 0001104659-25-019828
Chunk: 73

Company: REDWOOD TRUST INC
Filing Date: 2025-03-03
Form: S-3ASR
Chunk 73
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to include the full amount of the distribution (i.e., the cash and the stock portion) as a dividend (subject to limited exceptions) to
the extent of our current and accumulated earnings and profits for U.S. federal income tax purposes, as described above. The amount
of any distribution payable in our capital stock generally is equal to the amount of cash that could have been received instead of our
capital stock. Depending on the circumstances of a U.S. Holder, the tax on the distribution may exceed the amount of the distribution
received in cash, in which case such U.S. Holder would have to pay the tax using cash from other sources. If a U.S. Holder
sells our capital stock it received in connection with a taxable stock distribution in order to pay this tax and the proceeds of such
sale are less than the amount required to be included in income with respect to the stock portion of the distribution, such U.S. Holder
could have a capital loss with respect to the stock sale that could not be used to offset such income. A U.S. Holder that receives
our capital stock pursuant to such distribution generally has a tax basis in such capital stock equal to the amount of cash that could
have been received instead of such capital stock as described above, and has a holding period in such capital stock that begins on the
day immediately following the payment date for the distribution.

Capital Gain Dividends

Dividends that we properly
designate as capital gain dividends will generally be taxable to our taxable U.S. Holders as a gain from the sale or disposition
of a capital asset held for more than one year, to the extent that such gain does not exceed our actual net capital gain for the taxable
year, and may not exceed our dividends paid for the taxable year, including dividends paid the following year that are treated as paid
in the current year. U.S. Holders that are corporations may, however, be required to treat up to 20% of certain capital gain dividends
as ordinary income. If we properly designate any portion of a dividend as a capital gain dividend, then, except as otherwise required
by law, we presently intend to allocate a portion of the total capital gain dividends paid or made available to holders of all classes
of our capital stock for the year to the holders of each class of our capital stock in proportion to the amount that our total dividends,
as determined for U.S. federal income tax purposes, paid or made available to the holders of each such class of