Purchased an NFT for 0.25 ETH, then sold it for 0.5 ETH when ETH was around $4K USD. ETH is now $1200 USD. Is this considered a capital loss?

[ME512]

I have not converted my ETH to USD after the sale of the NFT.

[Critter-3]

No ... you bought and sold for a profit.  What the crypto did after you sold it is immaterial. 

[NCperson · Accepted solution]

From the way I understand how this works, each trade of ETH creates a reportable gain or loss transaction

1) when you sold ETH and purchased the NFT,  the price of ETH on that day, compared to when you first purchased ETH is a reportable gain or loss transaction

2) then when you sold the NFT, and purchased ETH, the NFT is a reportable gain or loss transactiion

3) when yiu eventually sell .5 ETH, there will be a reportable gain or loss transaction.  The cost basis is the purchase price in 2) above.