VolvoGirl, you are close, but not quite right. The divisor is the year-end balance plus the amount of the distribution. Using the numbers provided, the amount that is nontaxable is $50,000 * $20,000 / ($50,000 + year-end balance of about $500,000).
I think that vdirjohn now understands that because the basis in nondeductible contributions is distributed proportionately, the last of the basis will not be distributed until the last of the traditional IRA funds is distributed.
