Company: RWT-PA
Filing Date: 2025-08-22
Form Type: 424B5
Source: 0001104659-25-081925
Chunk: 103

Company: REDWOOD TRUST INC
Filing Date: 2025-08-22
Form: 424B5
Chunk 103
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 any gain realized upon the conversion, sale, exchange, redemption, retirement or other taxable disposition of a note (such amount excludes any amount allocable to accrued and unpaid interest, which generally will be treated as interest and may be subject to the rules discussed above in “— Taxation of Non-U.S. Holders of the Notes — Payments of Interest”) unless:

•

the gain is effectively connected with the Non-U.S. Holder’s conduct 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 gain is attributable);

•

the Non-U.S. Holder is a nonresident alien individual present in the United States for 183 days or more during the taxable year of the disposition and certain other requirements are met; or

•

the rules of the Foreign Investment in Real Property Tax Act (“FIRPTA”) treat the notes as “United States real property interests” (“USRPIs”) by reason of our status as a “United States real property holding corporation” (“USRPHC”).

Gain described in the first bullet point above generally will be subject to U.S. federal income tax on a net income basis at the regular rates. A Non-U.S. Holder that is a corporation also may be subject to a branch profits tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on such effectively connected gain, as adjusted for certain items.

A Non-U.S. Holder described in the second bullet point above will be subject to U.S. federal income tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on gain realized upon the conversion, sale, exchange, redemption, retirement or other taxable disposition of a note, which

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may be offset by U.S. source capital losses of the 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.

With respect to the third bullet point above, we do not believe that we are currently, or that we will become, a USRPHC for U.S. federal income tax purposes. Because the determination of whether a corporation is a USRPHC depends on the fair market value of the corporation’s USRPIs relative to the fair