Based upon your description, the “rollover” clause does not apply to you. You should only enter the amount of money that you withdrew from your IRAs.
Your wife’s “rollover” account is the brokerage firm’s way of alerting their staff and the IRS that they have no way of knowing the original basis of the account, since they have not always been the custodians. Therefore, they do not know if any of the contributions have already been taxed.
When line 7 refers to a rollover, they want to know if any of the money you withdrew this year was rolled over into another qualifying (pre-tax) account. If so, that money does not count as part of your Required Minimum Distribution (RMD) and is exempt from tax. Do not include a current year rollover on Line 7.
Instructions for Form 8606 can be found below.