An IRA ("I"individual Retirement Account) is just that. Your IRA and your spouses IRA are *totally* separate and would be reported as separate contributions to that spouses IRA and distribution on a 1099-R form reported for the spouse that the IRA belongs to. The basis in one spouses IRA has no effect on the other spouses IRA.
In your above question, if the $5,500 contribution was to your spouses IRA and she had no other Traditional IRA then the basis would only apply to her own IRA. The value of *your* IRA would be immaterial and the back-door conversion would be tax free if the year end value was zero.
Whether to contribute to a Traditional IRA or convert to a Roth should be discussed with your financial advisor. There are differing opinions on that depending on your age and how long to retirement. Conversions from a Traditional IRA usually work best if the tax can be paid from other funds and not from the distribution which reduced the amount that can grow tax free.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
