I have held (and continually rolled over) 3 foreign CDs since 2010. Due to foreign exchange fluctuations, my original investment in each is collectively down $10K, including accrued interest. I have properly paid IRS and state taxes on the interest earned on each of the last 3 tax years (reported by the bank in US dollars).

However, I have not declared (or thought of declaring) the loss on each CD, since I believed that the loss from each CD was unrealized (i.e., I did not close out the CDs and continually rolled them over to a new one).

Should I close them out, can I claim the loss in US dollar value as ordinary loss of income, due to the weakened foreign currency of the CD when converted back to US dollars? Put another way, can I simply calculate my realized foreign exchange loss between my original US dollar investment and final closed-out balance in the tax year executed (2014) converted in US dollars for each as recognized?
And would I need to file an IRS amendment for each of the prior 3 tax years for the difference between my original investment and balance at the end of the year for each of the prior years, however not realized? (I don't think so).

Since the earned interest on the CDs were treated as ordinary income, I would expect that the dollar loss value due to foreign exchange change would be treated as ordinary income as well, in the year that the loss was realized. (Based on reading other remarks within asktaxguru.com yet regarding foreign exchange losses although not specific to CDs).

Thanks.

PS / The calculation for the realized ordinary income loss would be the difference between my original investment (in US dollars) "plus total/historical interest earned", minus the final closed-out balance.