Taxpayer is contributing to a traditional IRA despite being over the income limits to deduct it.

The Taxpayer also has IRA distributions in the same year via 1099-R.

ProSeries is going through the calculations and successfully determining that the contribution is not tax-deductible.

However, it is reducing the taxable portion of the IRA distribution. I believe it was a Roth conversion - can someone explain if this treatment is correct or if I am forgetting to click something in ProSeries?