Yes, if she had $0 nondeductible in the traditional IRA ($0 basis) and converted the whole $16,000 then the whole $16,000 would be taxable because you convert pre-tax funds into after-tax funds. No, she won’t be double-taxed because of the pro-rata rule. If you converted $16,000 with a $4,856 basis then $4,856 of the conversion wouldn’t be taxable but the rest of $11,144 would be taxable income. The pro-rata rule just prevents you from only taking out the tax-free amount. This article The Pro-Rata Rule Explained – You Are Not Getting Double Taxed explains it pretty well.
Yes, Roth IRAs have the benefit that earning distributions will be tax-free if you take Qualified Distributions vs from traditional IRAs the earnings distributed will be taxable income.
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