You can see the pro-rata rule calculations on Form 8606 (sometimes TurboTax uses the Taxable IRA Distribution Worksheet instead).
She had a total basis of $6,479 in 2021 (basis from 2020 and contribution for 2021). The value and the amount converted each have a part of this basis allocated. $1,845 of the conversion are allocated to the basis therefore $5,450 are taxable.
Only the Form 1099-R that reports the conversion factors into the calculation. Yes, if your Form 1099-R amount converted would be less then this would affect the calculation and the taxable amount would be less.
@dhuynh44
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
