that 500 Lira is now worth $62.50 for which your cost basis is $100
you report the 100 Lira received as interest income on your US return as $12.50 which apparently you left in the a/c. so the 600 lira is now worth $75
your US tax basis is the original $100 + the $12.50 in interest. if and when the a/c is liquidated say for $75.00 you report a foreign exchange loss of $37.50
you don't get the loss on the decline in value until you liquidate the a/c. from a tax standpoint you really don't know your loss until it is liquidated. the value in US $ could go up or further down.
I should point out that if you withdraw the money to use for personal purposes, the loss in that portion is not deductible.
