# Redwood Trust Plans 2027 C-Corporation Shift, Sets $0.02 Dividend Policy

By John Kim

Canonical URL: https://www.tokenpost.com/news/business/48693
Published: 2026-11-04T18:06:26.000Z
Updated: 2026-11-04T18:06:26.000Z
Section: Business

> The company expects an initial $0.73 to $0.77 per-share GAAP book-value benefit in Q4 2026, based on results as of Sept. 30.

Redwood Trust’s board unanimously approved a plan to end its federal real estate investment trust (REIT) tax election and become a taxable C corporation for 2027, a change the company expects to increase GAAP book value per share.

The plan covers the calendar year ending Dec. 31, 2027. Redwood announced the decision at 4:16 p.m. ET Nov. 3 (21:16 UTC). The conversion remains planned and has not yet taken effect.

Redwood expects the planned conversion to produce an initial $0.73 to $0.77 benefit per common share to GAAP book value in the fourth quarter of 2026. The estimate is based on results as of Sept. 30 and reflects the company’s expected use of tax assets under the C-corporation structure. Redwood’s third-quarter results estimated a deferred tax asset of $85 million to $90 million, using 116.5 million outstanding common shares.

The per-share estimate could change with final tax and accounting determinations, changes in tax law or limits on the use of Redwood’s tax attributes. The company’s GAAP book value was $6.56 per common share on Sept. 30, down from $6.90 on June 30.

The board also approved a new quarterly common dividend policy of $0.02 per share. Redwood expects the policy to take effect when the board declares the fourth-quarter dividend in December 2026. The board has not yet declared the fourth-quarter dividend, which Redwood expects to declare in December 2026. The company paid a $0.18-per-share common dividend for the third quarter.

The new structure would let Redwood use net operating loss carryforwards from REIT-qualified businesses to offset taxes on earnings from its tax-paying businesses. It estimates about $304 million in U.S. federal net operating losses would be available after the conversion.

Redwood Trust is a specialty finance company focused on housing credit and residential mortgage banking. CEO Christopher J. Abate said, “Our next chapter is about translating those competitive advantages into greater value for shareholders.”