I don't agree with this part: "so the distribution will in effect decrease the tax basis of the Non-deductible IRA in the year of distribution and contribution, so when the non-ded IRA is converted, the tax basis decreases and will create a small taxable event on Form 8606 because the distribution was from a inherited pre-tax traditional IRA"

The nondeductible amount is contributed, then converted. It is 100% basis. For backdoor, that happens in a quick timeframe, really, so there is nothing taxable. Unless your client also has (a) traditional IRA with mixed contributions or delayed conversion and has earnings?

RMD from the inherited IRA doesn't change that backdoor basis. It might have its own basis consideration, of course.

"Estimating the taxable income from a conversion is straightforward if you've never made nondeductible contributions to any traditional IRA. If that is the case, whatever amount you convert will all be taxable income.

Note that earnings are always taxable when converted, whether they come from deductible or nondeductible contributions, so for purposes of figuring out taxes on a conversion, you can think of your balances as falling into just 2 categories: (1) nondeductible contributions, and (2) everything else. According to IRS rules, you cannot cherry-pick and convert just nondeductible contributions, leaving deductible contributions and earnings in the account, in order to avoid taxes. Instead, you must figure out the proportion of your total traditional IRA balances that is composed of nondeductible contributions, then use that percentage to find out how much of your conversion will not be taxable. Note that inherited IRAs are excluded in this calculation."

From: https://www.fidelity.com/learning-center/personal-finance/retirement/answers-to-roth-conversion-ques...