to the taxpayer. (4) Qualified distribution (A) In general The term qualified distribution means with respect to natural disaster fund an amount equal to the excess of— (i) costs, expenses, and losses (including losses of a type reimbursable by proceeds of business interruption insurance) incurred by the taxpayer as a result of the Federally declared natural disaster with respect to the line or lines of business for which the fund was designated, over (ii) the proceeds of property and business interruption insurance paid for the benefit of the taxpayer with respect to costs, expenses, and losses described in clause (i). (B) Limitation A distribution from a natural disaster fund shall not be treated as a qualified distribution if such distribution is allocated to a Federally declared natural disaster occurring more than 3 years before the date of such distribution. (h) Special rules For purposes of this section— (1) No double counting Any portion of any deductible or coinsurance taken into account under subsection (b)(6) in determining the maximum balance for a natural disaster fund shall not be taken into account in determining the maximum balance for another natural disaster fund. (2) Excess balance (A) In general If the balance of a natural disaster fund exceeds the maximum balance permitted by subsection (b)(6) by reason of investment earnings or a reduction in the maximum balance, the account shall not cease to be a natural disaster fund as the result of exceeding such limit if the excess is distributed within 120 days of the date that such excess first occurred. (B) Treatment of distributions of excess balance In the case of any distribution of the excess balance of a natural disaster fund within 120 days of the date that such excess first occurred— (i) paragraphs (2) and (3) of subsection (f) shall not apply to the distribution of such excess if distributed within such period, and (ii) the amount of such distribution shall be included in the gross income of the taxpayer in the year such distribution was