Your year-end value in traditional IRAs includes any IRA inherited from your spouse that you have chosen to treat as your own. Value of your traditional IRAs is not really "counted" in the sense that it would be double counted, it's used to determine the proportion of basis. Before you assumed ownership, the value just prior to assuming ownership is used to determine the proportion of your spouse's basis to value for determining the nontaxable amount of your spouse's distributions. Assuming ownership of the IRA makes that part of your own year-end value and, to answer your second question, you also acquire the remaining basis from line 14 of your spouse's Form 8606 prepared using the date-of death value, which must be entered into TurboTax as an adjustment to your own basis (which requires an explanation statement). Click the EasyGuide button after telling TurboTax that you have basis in your own IRAs.
To support the date-of-death value of the traditional IRA, the IRA custodian is supposed to issue a Form 5498 to the decedent showing the date-of-death value in the box intended for year-end value, but they almost never do.
