What you propose doing makes no sense. The tax consequences of a distribution from her traditional IRA have nothing to do with any contribution you make to your own Roth IRA. They are independent transactions. Unless the distribution from her traditional IRA are rolled over to another of her retirement accounts, the distribution will be taxable and, if she is under age 59½ and has no other penalty exception, will be subject to a 10% early-distribution penalty.
Further, if she takes a distribution from her traditional IRA that she does not roll over to another of her retirement accounts, for several years that will potentially reduce the amount of any Retirement Savings Contributions Credit to which either of you might otherwise qualify.
If you have no compensation of your own and file a joint tax return, you could make an IRA contribution that is support by her compensation (income from wages or from her own self-employment, not income from her IRA).
If your AGI is below your standard or itemized deductions, you might consider having your wife do a Roth conversion from her traditional IRA to her Roth IRA up to the point where it increases your AGI up to the amount of your standard or itemized deductions, resulting in this income being nontaxable. Roth conversion, while adding to AGI, are not subject to an early-distribution penalty.
