If you decide not to take a deduction on the $7,000 contribution, it should not be taxable.
Please clarify: Have you made your Traditional IRA contribution for 2021 and converted the contribution to Roth IRA and received Form 1099-R?
If not, enter your Traditional IRA contribution, and when you receive your 1099-R in 2023, enter it as a conversion.
If you have an existing Traditional IRA account already and it has a deductible contribution, part of the conversion will be taxable unless you have only non-deductible contributions.
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