; and (3) by inserting after subparagraph (D) the following: (E) covered bonds (as defined in section 341 of the Protecting American Taxpayers and Homeowners Act of 2018), . (b) Tax treatment of covered bond programs (1) Treatment of estates created under covered bond programs Section 7701 of the Internal Revenue Code of 1986 is amended by redesignating subsection (p) as subsection (q) and by inserting after subsection (o) the following new subsection: (p) Treatment of estates created under covered bond programs For purposes of this title— (1) Treatment as disregarded entity Any estate created with respect to a covered bond program— (A) shall not be treated as an entity subject to taxation separate from the owner of the residual interest with respect to such estate, and (B) shall be treated as a disregarded entity that is owned by the owner of such residual interest. (2) Limitations on treatment as disregarded entity (A) Maximum duration Paragraph (1) shall not apply with respect to an estate after the earlier of— (i) the end of the 30-year period beginning on the date of the creation of such estate, or (ii) the end of the 180-day period beginning on the date of the final payment on the last outstanding covered bond that is secured by the cover pool held by such estate. (B) Restrictions on owner of residual interest Paragraph (1) shall apply with respect to an estate for any period only if— (i) at no time during such period does more than one person hold a residual interest with respect to such estate, (ii) such person is— (I) subject to tax under subtitle A on the net income of such estate for the taxable year of such person which includes such period, or (II) a conservator, receiver, liquidating agent, or trustee in bankruptcy with respect to the issuer for such period, and (iii) such person is not a regulated investment company (as defined in section 851) or real estate investment trust (as defined in section 856) for the taxable year which includes such period. (3) Treatment as corporation With respect to any