On May 12, 2008, about 1850 Pacific daylight time, a Hawker Beechcraft Corporation B55, N5885C, collided with ground obstacles during a forced landing following a loss of power during the initial climb from Coeur d' Alene Air Terminal, Coeur d' Alene, Idaho. Action Flying was operating the airplane under the provisions of 14 Code of Federal Regulations Part 91. The airplane was substantially damaged. The certified flight instructor (CFI) was not injured; the private pilot undergoing instruction (PUI) sustained serious injuries. Visual meteorological conditions prevailed and no flight plan was filed for the local area instructional flight that departed about 1730. According to the CFI, he and the student were on a local instructional flight. After completing an approach into the airport, they initiated a takeoff. At approximately 200 feet above ground level, the left engine lost power. The student was flying the airplane and the CFI pushed the nose over to maintain airspeed. The CFI verified that the fuel selectors were positioned to the main tanks. He could not recall if the right engine also lost power. During the forced-landing, the airplane impacted a vehicle. In a conversation with the Safety Board investigator, the CFI indicated that the airplane's fuel tanks had been fueled to capacity on May 10. Fueling records obtained from the fueling facility at the airport indicated that 88.37 gallons of fuel were sold to the PUI on May 10 at the self-fueling facility. The CFI reported that they had flown 1.4 hours on May 10, and had flown about 1.4 hours on the day of the accident. During the last flight, they departed on the main tanks, switched to the auxiliary tanks during the flight, and then switched back to the main tanks 5 minutes prior to landing. During the flights on both days, the CFI indicated that they flew extensively on the auxiliary fuel tanks. According to the CFI, the fuel selectors were on the main tanks when the accident occurred. The Federal Aviation Administration accident coordinator responded to the accident scene. He reported that all of the fuel tanks were breached and residual fuel of 1 gallon was located in the right main tank. Due to the damage, the amount of fuel contained in each tank prior to the accident could not be confirmed. The fuel selectors were positioned to the main tanks. The fuel manifold valves were removed from each engine and no fuel was evident. No anomalies were noted with the airframe fuel system. A Teledyne Continental Motors representative examined the engines following the accident. No mechanical anomalies were identified that would have resulted in a loss of engine power. The representative did not identify any fuel in the fuel lines to the engine fuel pumps. According to a Hawker Beechcraft Representative, pilots are to takeoff and land on the main tanks only.