Company: RWT-PA
Filing Date: 2025-01-16
Form Type: 424B5
Source: 0001104659-25-004099
Chunk: 93

Company: REDWOOD TRUST INC
Filing Date: 2025-01-16
Form: 424B5
Chunk 93
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treated as a corporation for U.S. federal income tax purposes) qualifies as our qualified REIT subsidiary if we own 100% of the corporation’s
outstanding stock and do not elect with the subsidiary to treat it as a TRS, as described below. A qualified REIT subsidiary is not treated
as a separate corporation, and all assets, liabilities and items of income, gain, loss, deduction and credit of a qualified REIT subsidiary
are treated as assets, liabilities and items of income, gain, loss, deduction and credit of the parent REIT for all purposes under the
Code, including all REIT qualification tests. Thus, in applying the U.S. federal income tax requirements described in this discussion,
any qualified REIT subsidiaries we own are ignored, and all assets, liabilities and items of income, gain, loss, deduction and credit
of such corporations are treated as our assets, liabilities and items of income, gain, loss, deduction and credit. A qualified REIT subsidiary
is not subject to U.S. federal income tax, and our ownership of the stock of a qualified REIT subsidiary will not violate the restrictions
on ownership of securities, as described below under “Material U.S. Federal Income Tax Considerations—Taxation of the Company—Asset
Tests.”

Ownership of Interests in TRSs

From time to time, we may
own interests in one or more companies that have elected, together with us, to be treated as our TRSs, and we may acquire securities
in additional TRSs in the future. A TRS is a corporation (or other entity treated as a corporation for U.S. federal income tax purposes),
other than a REIT, in which a REIT directly or indirectly holds stock, and that has made a joint election with such REIT to be treated
as a TRS. If a TRS owns more than 35% of the total voting power or value of the outstanding securities of another corporation, such other
corporation will also be treated as a TRS. Other than some activities relating to lodging and health care facilities, a TRS may generally
engage in any business. A TRS is subject to U.S. federal income tax as a regular C corporation. A REIT is not treated as holding the
assets of a TRS or as receiving any income that the TRS earns. Rather, the stock issued by the TRS is an asset in the hands of the REIT,
and the REIT generally