Your concept is correct. I'll answer the questions that I can, but you would have to contact Robinhood for individual details.
The 1099 that I received from Robinhood still has all the wash sale loss disallowed and when I looked in detail to the final sale of those stocks, the cost basis was not calculated using the updated amount of the wash sale.
The Wash sale will be carried on all of the affected sales up until the final. A derivative like a Call or a Put will also carry the wash sale even if you sell the underlying stock position.
Does anyone know if Robinhood even does this calculation or do I have to go and do it manually?
Most brokerage houses do maintain that calculation. You would have to talk directly to Robinhood to confirm their process. If you wish to follow it through manually it is a daunting process. You must check every transaction and re-calculate it.
Currently what I see is that even after all positions were sold that I have a Cost of about $130.000, Proceeds of about $100.000, wash sales for about $20.000, and only $10.000 are recognized as a loss. Considering I sold everything in July/Aug, shouldn't the wash sales have been released or added to the cost basis?
You are correct that if you closed ALL of the positions the wash sale should have cleared itself. It is a mathematical nightmare. I did it only once and it was correct.
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