diff --git a/compiler/backend/src/org/jetbrains/jet/codegen/inline/MethodInliner.java b/compiler/backend/src/org/jetbrains/jet/codegen/inline/MethodInliner.java
index 79f730f1054..9e70170d5fa 100644
--- a/compiler/backend/src/org/jetbrains/jet/codegen/inline/MethodInliner.java
+++ b/compiler/backend/src/org/jetbrains/jet/codegen/inline/MethodInliner.java
@@ -356,7 +356,6 @@ public class MethodInliner {
 
         AbstractInsnNode cur = node.instructions.getFirst();
         int index = 0;
-        Set<LabelNode> possibleDeadLabels = new HashSet<LabelNode>();
 
         while (cur != null) {
             Frame<SourceValue> frame = sources[index];
@@ -416,15 +415,12 @@ public class MethodInliner {
             if (frame == null) {
                 //clean dead code otherwise there is problems in unreachable finally block, don't touch label it cause try/catch/finally problems
                 if (prevNode.getType() == AbstractInsnNode.LABEL) {
-                    possibleDeadLabels.add((LabelNode) prevNode);
+                    //NB: Cause we generate exception table for default handler using gaps (see ExpressionCodegen.visitTryExpression)
+                    //it may occurs that interval for default handler starts before catch start label, so this label seems as dead,
+                    //but as result all this labels will be merged into one (see KT-5863)
                 } else {
                     node.instructions.remove(prevNode);
                 }
-            } else {
-                //Cause we generate exception table for default handler using gaps (see ExpressionCodegen.visitTryExpression)
-                //it may occurs that interval for default handler starts before catch start label, so this label seems as dead,
-                //but as result all this labels will be merged into one (see KT-5863)
-                possibleDeadLabels.remove(prevNode.getPrevious());
             }
         }
 
@@ -432,7 +428,7 @@ public class MethodInliner {
         List<TryCatchBlockNode> blocks = node.tryCatchBlocks;
         for (Iterator<TryCatchBlockNode> iterator = blocks.iterator(); iterator.hasNext(); ) {
             TryCatchBlockNode block = iterator.next();
-            if (possibleDeadLabels.contains(block.start) && possibleDeadLabels.contains(block.end)) {
+            if (isEmptyTryInterval(block)) {
                 iterator.remove();
             }
         }
@@ -440,6 +436,15 @@ public class MethodInliner {
         return node;
     }
 
+    private static boolean isEmptyTryInterval(@NotNull TryCatchBlockNode tryCatchBlockNode) {
+        LabelNode start = tryCatchBlockNode.start;
+        AbstractInsnNode end = tryCatchBlockNode.end;
+        while (end != start && end instanceof LabelNode) {
+            end = end.getPrevious();
+        }
+        return start == end;
+    }
+
     public LambdaInfo getLambdaIfExists(AbstractInsnNode insnNode) {
         if (insnNode.getOpcode() == Opcodes.ALOAD) {
             int varIndex = ((VarInsnNode) insnNode).var;
diff --git a/compiler/testData/codegen/boxInline/nonLocalReturns/tryFinally/exceptionTable/synchonized.1.kt b/compiler/testData/codegen/boxInline/nonLocalReturns/tryFinally/exceptionTable/synchonized.1.kt
new file mode 100644
index 00000000000..20c72b783fa
--- /dev/null
+++ b/compiler/testData/codegen/boxInline/nonLocalReturns/tryFinally/exceptionTable/synchonized.1.kt
@@ -0,0 +1,18 @@
+import test.*
+
+fun call(): String {
+    return nonLocal()
+}
+
+inline fun nonLocal(): String {
+    mysynchronized(Object()) {
+        return "nonLocal"
+    }
+    return "local"
+}
+
+fun box(): String {
+    val call = call()
+    if (call != "nonLocal") return "fail $call"
+    return "OK"
+}
\ No newline at end of file
diff --git a/compiler/testData/codegen/boxInline/nonLocalReturns/tryFinally/exceptionTable/synchonized.2.kt b/compiler/testData/codegen/boxInline/nonLocalReturns/tryFinally/exceptionTable/synchonized.2.kt
new file mode 100644
index 00000000000..dcf18fa5923
--- /dev/null
+++ b/compiler/testData/codegen/boxInline/nonLocalReturns/tryFinally/exceptionTable/synchonized.2.kt
@@ -0,0 +1,11 @@
+package test
+
+public inline fun <R> mysynchronized(lock: Any, block: () -> R): R {
+    try {
+        return block()
+    }
+    finally {
+        //do nothing
+        1
+    }
+}
\ No newline at end of file
diff --git a/compiler/tests/org/jetbrains/jet/codegen/generated/BlackBoxInlineCodegenTestGenerated.java b/compiler/tests/org/jetbrains/jet/codegen/generated/BlackBoxInlineCodegenTestGenerated.java
index d27fb28dcd3..aafb85af3d7 100644
--- a/compiler/tests/org/jetbrains/jet/codegen/generated/BlackBoxInlineCodegenTestGenerated.java
+++ b/compiler/tests/org/jetbrains/jet/codegen/generated/BlackBoxInlineCodegenTestGenerated.java
@@ -567,6 +567,12 @@ public class BlackBoxInlineCodegenTestGenerated extends AbstractBlackBoxCodegenT
                     doTestMultiFileWithInlineCheck(fileName);
                 }
 
+                @TestMetadata("synchonized.1.kt")
+                public void testSynchonized() throws Exception {
+                    String fileName = JetTestUtils.navigationMetadata("compiler/testData/codegen/boxInline/nonLocalReturns/tryFinally/exceptionTable/synchonized.1.kt");
+                    doTestMultiFileWithInlineCheck(fileName);
+                }
+
                 @TestMetadata("throwInFinally.1.kt")
                 public void testThrowInFinally() throws Exception {
                     String fileName = JetTestUtils.navigationMetadata("compiler/testData/codegen/boxInline/nonLocalReturns/tryFinally/exceptionTable/throwInFinally.1.kt");
diff --git a/compiler/tests/org/jetbrains/jet/jvm/compiler/CompileKotlinAgainstInlineKotlinTestGenerated.java b/compiler/tests/org/jetbrains/jet/jvm/compiler/CompileKotlinAgainstInlineKotlinTestGenerated.java
index df3ce0dcf8b..cb64bfa128a 100644
--- a/compiler/tests/org/jetbrains/jet/jvm/compiler/CompileKotlinAgainstInlineKotlinTestGenerated.java
+++ b/compiler/tests/org/jetbrains/jet/jvm/compiler/CompileKotlinAgainstInlineKotlinTestGenerated.java
@@ -567,6 +567,12 @@ public class CompileKotlinAgainstInlineKotlinTestGenerated extends AbstractCompi
                     doBoxTestWithInlineCheck(fileName);
                 }
 
+                @TestMetadata("synchonized.1.kt")
+                public void testSynchonized() throws Exception {
+                    String fileName = JetTestUtils.navigationMetadata("compiler/testData/codegen/boxInline/nonLocalReturns/tryFinally/exceptionTable/synchonized.1.kt");
+                    doBoxTestWithInlineCheck(fileName);
+                }
+
                 @TestMetadata("throwInFinally.1.kt")
                 public void testThrowInFinally() throws Exception {
                     String fileName = JetTestUtils.navigationMetadata("compiler/testData/codegen/boxInline/nonLocalReturns/tryFinally/exceptionTable/throwInFinally.1.kt");