Your IRAs, and the basis in those IRAs, are separate from your wife's IRAs. They are also separate from any inherited IRAs. The pro-rata calculation is perform separately on a Form 8606 for you and a Form 8606 for your wife. (TurboTax designates the separate Forms 8606 as Form 8606-T for Taxpayer and Form 8606-S for Spouse.) When entering the basis and year-end value to be used in your pro-rata calculation, enter only your basis and the total year-end value of your IRAs.
Section 408 of the tax code defines IRAs as individual accounts, with all accounts owned by the individual treated as one account for tax purposes. They are never considered in combination with another IRA owner's accounts.
