Code 2 must NEVER be changed to code G!
These two codes are used for entirely different transactions. Code 2 with the IRA/SEP/SIMPLE box marked is the correct code for an in-house Roth conversion from a traditional IRA. Basis in nondeductible traditional IRA contributions is applied on Form 8606 to calculate the taxable amount of the Roth conversion. If the year-end balance in traditional IRAs is not zero, and the sum of the year end balance and your distributions from traditional IRAs, including the Roth conversion is greater than your basis, some amount, perhaps a large amount, of the Roth conversion will be taxable.
I'm not sure why fanfare mentioned code H, but as fanfare said, code H has nothing to do with a backdoor Roth. Code H is only for reporting a rollover from a designated Roth account in an employer plan like a 401(k) to a Roth IRA.
