If you sell an NFT for ETH (for simplicity let's assume you minted the NFT 'for free'), you owe capital gains on the dollar amount of ETH received -- as well as cap gains on the ETH when you sell it.

You might think the latter is zero if you sell the ETH immediately after you receive it, but if you're using FIFO accounting -- which most people do -- you're owing cap gains based on your ETH owned prior to the actual trade. The cap gains realized here could be substantial depending on your earliest ETH.

Specific ID is one way out (e.g. "I'm selling the newly-traded ETH"), but no crypto tax platform I know of allows you to assign specific tax lots for a trade. Since using Spec ID affects all your tax calculations going forward, to manually incorporate this into a excel-based FIFO accounting system would be a nightmare (and would likely mean you can't use a specific crypto tax software in the future due to incompatibility / complexity).

NFT trades are a f*cking tax nightmare. Please tell me if something here is wrong!