On January 13, 2023, about 1530 Alaska daylight time, a Taylorcraft BL-65 airplane, N29886, was substantially damaged when it was involved in an accident near Point Mackenzie, Alaska. The pilot was not injured. The airplane was operated as a Title 14 Code of Federal Regulations Part 91 personal flight. According to the pilot, last month after a heavy snow fall, the nose fuel tank cap was found dislodged, allowing snow to accumulate into the tank. On the day of the accident, during the airplane preflight inspection, the pilot sampled fuel from the fuel tank and found water in the fuel. He drained fuel until there was no more sign of water. He departed from Lake hood Airport (LHD) and during cruise flight the engine began to run rough. He performed a precautionary landing to a road. The pilot drained fuel from the fuel tank again and found water in the fuel. He drained fuel until there was no more sign of water. His mechanic responded to the site to assist the pilot. The mechanic drained all the fuel from the carburetor to ensure there was no water. They started the engine, and it ran smoothly for 10 minutes. The pilot departed from the road to fly back to LHD and shortly after departure the engine began to run rough again. The pilot performed a precautionary landing back on the road. During the landing roll the right wing impacted a street sign, and the airplane came to rest in a ditch. The airplane sustained substantial damage to the right wing. Postaccident examination of the engine revealed water in fuel samples drained from the gascolator and carburetor. Other than the presence of water, no anomalies were noted with the engine that would have precluded normal operation.