Company: RWT-PA
Filing Date: 2025-01-15
Form Type: 424B5
Source: 0001104659-25-003632
Chunk: 112

Company: REDWOOD TRUST INC
Filing Date: 2025-01-15
Form: 424B5
Chunk 112
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% excise tax described below. However,
we will be required to pay interest to the IRS based upon the amount of any deduction claimed for deficiency dividends. While the payment
of a deficiency dividend will apply to a prior year for purposes of our REIT distribution requirements, it will be treated as an additional
distribution to our stockholders in the year such dividend is paid.

Furthermore, we will be required
to pay a 4% excise tax to the extent we fail to distribute during each calendar year at least the sum of 85% of our ordinary income for
such year, 95% of our capital gain net income for the year and any undistributed taxable income from prior periods. Any ordinary income
and net capital gain on which corporate income tax is imposed for any year is treated as an amount distributed during that year for purposes
of calculating this excise tax.

For purposes of the 90% distribution
requirement and excise tax described above, dividends declared during the last three months of the taxable year, payable to stockholders
of record on a specified date during such period and paid during January of the following year, will be treated as paid by us and
received by our stockholders on December 31 of the year in which they are declared.

Failure to Qualify

If we discover a violation
of a provision of the Code that would result in our failure to qualify as a REIT, certain specified cure provisions may be available
to us. Except with respect to violations of the gross income tests and asset tests (for which the cure provisions are described above),
and provided the violation is due to reasonable cause and not due to willful neglect, these cure provisions generally impose a $50,000
penalty for each violation in lieu of a loss of REIT status. If we fail to satisfy the requirements for taxation as a REIT in any taxable
year, and the relief provisions do not apply, we will be required to pay regular U.S. federal corporate income tax, including any applicable
alternative minimum tax for taxable years beginning before January 1, 2018, on our taxable income. Distributions to our stockholders
in any year in which we fail to qualify as a REIT will not be deductible by us. As a result, we anticipate that our failure to qualify
as a REIT would reduce the cash available for distribution by us to our stockholders. In addition, if we fail to qualify as a REIT, we
will not be required to distribute any amounts