Final answer:
An unrealized loss from recording investments at fair value that is tax-deductible upon sale is termed an unrealized capital loss. It reflects a decrease in the investment's value that is not realized until the investment is sold.
Step-by-step explanation:
The term for an unrealized loss from recording investments at fair value, which is tax-deductible when the investments are sold, is often referred to as an unrealized capital loss.
In accounting, unrealized losses are recognized when investments are valued at fair market value, but the actual loss cannot be claimed for tax purposes until the investment is sold and the loss is realized. The distinction between unrealized and realized capital losses is important for tax reporting and financial analysis.