1) Yes, it appears that your husband had no basis in nondeductible traditional IRA contributions remaining.
2) This is just an ordinary Roth conversion. With no basis in nondeductible traditional IRA contributions there is no need for Form 8606 Part I. The $100,000 Roth conversion is entirely taxable as shown on Form 8606 Part II. The other $25,000 distributed is also taxable for a total of $125,000 on Form 1040 line 4b.
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