Q. Does it (calculation of the basis-earnings) matter whether the distributions in previous years were for qualifying expenses or not?
A. No.
Q. Does that mean that for 2023, the contributions would be considered to be 28000 - (50% of 5000) = $25500?
A. Highly unlikely, depending on how the plan does the calcs, by overall account or individual investments in the account.
More likely; if the 2022 distribution was 50% earnings, then the money that was left in the account was also 50% earnings.
