"Is it because the contribution and conversion for 2020 did not occur until 2021, so form 8606 had a value in line 14? Then, because the 2021 contribution and conversion and the 2020 contribution and conversion occurred in calendar 2021, it left a ZERO balance in 2021, therefore Form 8606 line 14 in calendar 2021 had a $0?"
Sort of. There was no conversion "for" 2020. There was a conversion in 2021 of the entire balance in traditional IRAs, consuming all of the basis carried into 2021 from 2020 as well as all of the basis from the 2021 contribution, leaving $0 on line 14 of the 2021 Form 8606 to carry forward to 2022. All of the reporting you've shown from your 2020 and 2021 tax returns is exactly as it should be.
With no money in traditional IRAs at the end of 2021, everything starts fresh in 2022 because there is nothing that carries over from 2021.
When you make a contribution and distribution/conversion in the same year, TurboTax uses Worksheet 1-1 from IRS Pub 590-B to calculate the taxable amount of the distribution or conversion. This worksheet causes basis from a contribution for 2022 made in 2023 to be applied to 2022 distributions and conversions when it otherwise would not be applied.
