Redwood Trust Announces Dividend Distribution Tax Information for 2025
29 Jan 2026
Redwood” or the “Company”), a leader in expanding access to housing for homebuyers and renters, today announced tax information regarding its dividend distributions for 2025.
Shareholders should check the tax statements they receive from their brokerage firms to confirm the Redwood dividend distribution information reported in those statements conforms to the information reported here. Set forth in this press release are Redwood's expectations with respect to the treatment of the Company’s 2025 dividend distributions for federal income tax purposes. Shareholders should consult their tax advisors to determine the amount of taxes that should be paid on Redwood's dividend distributions for federal, state, and other income tax purposes.
All common stock dividend distributions paid during 2025 are reportable on shareholders' 2025 federal income tax returns. Under the federal income tax rules applicable to real estate investment trusts (“REITs”), Redwood's 2025 common stock dividend distributions are expected to be characterized for income tax purposes as 39% ordinary income (Section 199A), 2% qualified dividends, and 59% return of capital.
Preferred stock dividend distributions paid in April, July, and October 2025 and in January 2026 are reportable on shareholders' 2025 federal income tax returns. Redwood's 2025 preferred stock dividend distributions are expected to be characterized for federal income tax purposes as 96% ordinary income (Section 199A) and 4% qualified dividends.
Due to Redwood’s classification as a REIT, the portion of both the 2025 common and preferred dividend distributions that can be characterized as qualified dividends is limited to Redwood’s qualified dividend income for the year. The amount characterized as ordinary income under the applicable federal income tax rules are generally taxed at full ordinary income tax rates.
Individual taxpayers may generally take a deduction from taxable income of 20% of their ordinary income REIT dividends under section 199A, provided that certain holding period requirements are satisfied. This deduction does not apply to REIT dividends classified as a return of capital, as qualified dividends, or as capital gain dividends.
For shareholders that are corporations, Redwood's dividend distributions are not generally eligible for the corporate dividends-received deduction or the 20% ordinary REIT dividend deduction.The tables below provide more detailed information on the expected federal income tax characterization for each of Redwood's common and preferred stock dividend distributions that were attributable to 2025.
Common Stock (CUSIP 758075 40 2)
No portion of Redwood's 2025 common or preferred dividend distributions is expected to consist of unrelated business taxable income (“UBTI”), subject to specialized tax reporting and other rules applicable for certain tax-exempt investors.