I purchased an Acre (no buildings) on the Big Island in December 2017 in the Leilani Estates neighborhood. It was fully landscaped, leveled, and ready to build on with a fruiting food forest and cost $35000. In 2018 the acre was covered by about 40 Ft of Lava as it was only a short distance from Fissure 8 that dumped a few square kilometers of Lava onto the surface of the island. There is no street access or utilities to the property anymore and it is unlikely to be restored any time this decade. The County of Hawaii is trying to buy out many of the affected properties and may buy ours out for 22K (the median Tax value of the property in 2017) if we are lucky. Otherwise we will have to sell out for even more of a loss.
If we sell out this year how would we handle that on the taxes next year? Is Turbotax set up for that? Are there any special tax rules for properties lost to natural disasters?
Thank you for your input!
