You are correct, ($1199 if I recall correctly is figured as the basis) but because there is a return amount in all but the full distribution, the yearly loss is reduced. With the full amount you loose almost twice what you would have received if you took nothing. Please notice the total loss in each of the cases is about the same. One could say it is almost a constant in each complete cycle of total distribution. I had to look at the results very close. The real gain comes when spreading over 2 or 3 yrs the lower tax rate and lessened impact to overall income joined together to improve the realized gain at the end of complete distribution. One WILL loose a bit under 1/3 of the IRA value but you can manage the impact of the gain. At least that is how it appears to me.
