Example: say the 1099-B has -15K in losses and 1099-R has 25K in "income" from the conversion. TurboTax seems to be treating entry of both forms as 25K in income, and not reducing net taxable income to 10K. Both forms are from the same Brokerage house.
Capital losses first offset capital gains, then up to a maximum of $3,000 of remaining losses can appear on form 1040 line 7 to offset other income such as the taxable amount of the Roth conversion. Losses that cannot be used are carried forward to future years. With $25,000 of taxable Roth conversion and no other losses such as a net loss from self-employment, your total income on Form 1040 line 9 cannot be less than $22,000.
A loss from a 1099-B will not directly offset income from a 1099-R. Both forms are about different types of income. They go to different places on your income tax return. A 1099-B from a brokerage is investment income. A 1099-R Roth conversion is ordinary retirement income.
Capital losses from a 1099-B will first offset any other capital gains. On top of that, you can deduct $3,000 against ordinary income and carry the remaining amount to next year.
If you had no capital gains, you could deduct $3,000 as a capital loss on your 2022 return and carry $12,000 to the next year.