Your basis does not increase by substituting other funds to replace those withheld for taxes because taxes can only be paid with after-tax money. You are simply replacing one after-tax dollar with another after-tax dollar, so there is no change in basis (and by rolling over that dollar it goes back to being pre-tax since it will be excluded from from your AGI on your tax return). The taxable result of rolling over the entire gross amount of a distribution is the same as if the distribution never happened.
