If your traditional IRA contribution in January 2017 was for 2017, your basis from prior years was zero, not $1,500.
Your rollover of the pre-tax $1,500 from the 401(k) to the traditional IRA in December has caused your Roth conversion to become partially taxable, with only a portion of you basis in nondeductible traditional IRA contributions being applicable to your Roth conversion and the remainder of your basis staying with your traditional IRAs.
With $1,500 of pre-tax money rolled to the traditional IRA before the end for 2017 and assuming no gain or loss, resulting in a year-end balance of $1,500 in the traditional IRA , the nontaxable amount of your Roth conversion calculated on Form 8606 will be:
$5,500 * ($5,500 / ($5,500 + $1,500)) = $4,321
The taxable portion will be:
$5,500 - $4,321 = $1,179
The basis remaining in your traditional IRAs is also $1,179.
If there was any gain or loss resulting in a traditional IRA year-end balance different from $1,500, the calculation will be different.
Had you waited until 2018 to do the rollovers from the 401(k) you would not have created this complication. As it stands, it would make sense to convert the rest of your traditional IRA in 2018 so as to leave a zero balance in your traditional IRAs at the end of 2018.
