Company: RWT-PA
Filing Date: 2025-08-22
Form Type: 424B5
Source: 0001104659-25-081925
Chunk: 98

Company: REDWOOD TRUST INC
Filing Date: 2025-08-22
Form: 424B5
Chunk 98
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 fractional share or attributable to accrued but unpaid interest). A U.S. Holder’s adjusted tax basis in a note generally will be equal to the amount that the U.S. Holder paid for the note, excluding an amount allocable to any pre-acquisition accrued interest, plus the amount, if any, included in income by the U.S. Holder on an adjustment to the conversion rate of the note, as described in “Material U.S. Federal Income Tax Considerations — Federal Income Tax Considerations for Holders of the Notes and Our Common Stock — Taxation of U.S. Holders of the Notes — Constructive

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Distributions” below, plus any market discount included in income, reduced by any amortized bond premium. Any gain or loss recognized by a U.S. Holder on conversion of a note generally would be capital gain or loss and generally would be long-term capital gain or loss if, at the time of the conversion, the note has been held for more than one year. The tax basis of our common stock received upon such a conversion (including any fractional share deemed to be received by the U.S. Holder, but excluding any common stock attributable to accrued but unpaid interest, the tax basis of which would equal its fair market value) would equal the adjusted tax basis of the note that was converted, reduced by the amount of any cash received (excluding cash received in lieu of a fractional share or attributable to accrued but unpaid interest), and increased by the amount of gain, if any, recognized (other than gain recognized on any cash received with respect to a fractional share). A U.S. Holder’s holding period for common stock would include the period during which the U.S. Holder held the note.

The amount of gain or loss a U.S. Holder will recognize on the receipt of cash in lieu of a fractional share will be equal to the difference between the amount of cash the U.S. Holder receives in respect of the fractional share and the portion of the U.S. Holder’s adjusted tax basis in the note that is allocable to the fractional share. Any such gain or loss generally will be capital gain or loss and generally will be long-term capital gain or loss if, at the time of the conversion, the note has been held for more than one year.

Alternative Treatment as Part Conversion and Part Redemption . If the conversion of a note into cash and common stock were not treated as a recapitalization as discussed above, the cash payment received may be