It appears that your MAGI for the purpose of a deduction for your your wife's traditional IRA contribution is in the phase-out range for a deduction for a traditional IRA contribution. (If your wife is not covered by a workplace retirement plan, the phase-out range for deductibility of a traditional IRA contribution is higher than your own phase-out range).
Because all of your wife's traditional IRA funds were converted to Roth, it doesn't matter whether any part of her contribution is treated as deductible or not. The portion treated as deductible simply increases that taxable amount of the Roth conversion by an equal amount. The increase in the taxable amount is offset by the deduction, resulting in the same AGI that you would have if the contribution was treated as entirely nondeductible.
