Yes, the basis each year will be used against the FMV each year, for computing the taxable and nontaxable portions of each distribution year. Realize it will change, as there are earnings, and every distribution reduces basis.

$100,000 account FMV, $20k basis and $20k distribution =

20% nontaxable and 80% taxable.

$4k nontaxable + $16k taxable.

And now, $20k basis - $4k = $16k basis remaining.

Every year, recompute basis, then recompute prorata.