Company: RWT-PA
Filing Date: 2025-01-16
Form Type: 424B5
Source: 0001104659-25-004099
Chunk: 89

Company: REDWOOD TRUST INC
Filing Date: 2025-01-16
Form: 424B5
Chunk 89
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 by which we fail to satisfy the 75% gross income test and (B) the amount by which we fail to satisfy the 95% gross income       
 test, multiplied by (2) a fraction intended to reflect our profitability.                                                              |

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| · | If we fail                                                                                                                                
 to satisfy any of the asset tests (other than a de minimis failure of the 5% or 10% asset test), as described below, due to               
 reasonable cause and not due to willful neglect, and we nonetheless maintain our REIT qualification because of specified cure provisions, 
 we will be required to pay a tax equal to the greater of $50,000 or the U.S. federal corporate income tax rate multiplied by the          
 net income generated by the nonqualifying assets that caused us to fail such test.                                                        |

| · | If we fail                                                                                                                              
 to satisfy any provision of the Code that would result in our failure to qualify as a REIT (other than a violation of the gross income  
 tests or certain violations of the asset tests, as described below) and the violation is due to reasonable cause and not due to willful 
 neglect, we may retain our REIT qualification but we will be required to pay a penalty of $50,000 for each such failure.                |

| · | 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 (1) 85% of 
 our ordinary income for the year, (2) 95% of our capital gain net income for the year, and (3) any undistributed taxable     
 income from prior periods.                                                                                                   |

| · | If we acquire                                                                                                                            
 any asset from a corporation that is or has been a C corporation in a transaction in which our tax basis in the asset is less than       
 the fair market value of the asset, in each case determined as of the date on which we acquired the asset, and we subsequently recognize 
 gain on the disposition of the asset during the five-year period beginning on the date on which we acquired the asset, then we generally 
 will be required to pay regular U.S. federal corporate income tax on this gain to the extent of the excess of (1) the fair market        
 value of the asset over (2) our adjusted tax basis in the asset, in each case determined as of the date on which we acquired             
 the asset. The results described in