The way I understand the pro-rata rule is that if you have $5K in T-IRA (deductible), open and contribute $5K to a new T-IRA (non-deductible), then decide to convert the latter $5K into Roth IRA, you will owe tax on $2.5K because in this case $2.5K came out of deductible and $2.5K of non-deductible T-IRA.
With that being said I have two question:
If I have $5K (T-IRA deductible) with VanGuard and have another $5K (T-IRA deductible) with TRowe. Am I right to assume that in the eyes of IRS it doesn't matter which organization the T-IRA is in, and if I want to contribute to non-deductible IRA for the purpose of a transfer to Roth, I should take both in consideration, regardless of with which institution I will create a new T-IRA (non-deductible) plan? Which means I will pay tax on roughly $3333 in this case.
Similarly if I have a variable annuity with NWM, is that considered as an T-IRA in this case?