To add to what Critter-3 said:
The NFT is treated exactly the same as stock. Everything that Critter-3 said applies.
If you sold the stock or NFT and received Ethereum as payment for it, the Ethereum is then a new investment. When you sell the Ethereum, that's another investment sale that you have to report. The basis of the Ethereum is the value on the date that you received it as payment for the stock or NFT. You have a gain or loss on the Ethereum depending on whether you sell it for more or less than the basis. The gain or loss is short-term or long-term, depending on how long you held it, from the date you received the Ethereum as payment to the date that you sold it.
Actually, Critter-3's reply provides a good way to think about this. Think of Ethereum as a stock. Think of an NFT as a different stock. That should make it more clear how to report the transactions.
