Losses on capital (personal) assets are not deductible, but this would appear to be an investment. While it is true section 988 does not apply to "personal transactions", since the funds were invested and earning interest, they are clearly more of an investment than a capital asset, so the loss would seem to be deductible.
The loss would not be a casualty loss, as that would entail it being sudden, unexpected or unusual.
According to section 988, the loss would be treated as an offset to ordinary income, since I assume an election was not made at the time the funds were invested to treat it as capital gain income. As such, you would report it in TurboTax by clicking on the following tabs:
- Income and Expenses
- Add more income
- Less common income
- Miscellaneous Income
- Other Reportable Income
- Enter description (FOREX losses) and the loss as a negative amount
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