To evaluate the casualty loss - we need to know the FMV before and after casualty.
Please be aware - that is not replacement cost for insurance purposes.
If you spent $220,000 in construction expenses - it i s possible that the FMV would be close to that number - but it may be more or less as well.
According to the IRS - fair market value (FMV) is the price that property would sell for on the open market. It is the price that would be agreed on between a willing buyer and a willing seller, with neither being required to act, and both having reasonable knowledge of the relevant facts.
In making and supporting the valuation of property, all factors affecting value are relevant and must be considered. These include:
The cost or selling price of the item,
Sales of comparable properties,
Replacement cost, and
Opinions of experts.
This is not to say that a valuation is only guesswork. You must consider all the facts and circumstances connected with the property, such as its desirability, use, and scarcity.
So if FMV of the property before casualty was $220,000 and after casualty - zero - your loss is $220,000. As $70,000 were reimbursed - your deductible casualty loss is $150,000.
Now - you said that the land was not damaged by the storm - I do not think that is correct because you had to clean the land before starting a new construction. So FMV of the land was lower because (1)all areas around was damages (2)there was additional cost to clean debris.
See for details the IRS publication 547, Casualties, Disasters, and Thefts - http://www.irs.gov/pub/irs-pdf/p547.pdf
To claim a casualty or theft loss, you must complete Form 4684, Casualties and Thefts, and attach it to your return.
You may claim casualty or theft loss of personal use property only if you itemize deductions on Form 1040, Schedule A .