Please be aware, that Form 1040 4a shows your total distributions and not the nondeductible part. If you didn't have any earnings during the conversion then you will have a $0 taxable amount in line 4b. Sometimes TurboTax will not show the amount in 4a but that doesn't affect the correctness of the amount in 4b.
Yes, if you have a retirement plan at work and are over the income limit it will be nondeductible automatically and you only get a screen saying $0 is deductible. Your basis of $7,000 will be entered on line 1 of Form 8606. You will have two Form 8606 one for you and one for your wife.
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