diff --git a/src/EditorFeatures/CSharpTest/InlineDeclaration/CSharpInlineDeclarationTests.cs b/src/EditorFeatures/CSharpTest/InlineDeclaration/CSharpInlineDeclarationTests.cs
index b49816336a652f5c9e97be788b76f61cdd7f185a..839cf904054bf7869c02046d233d5e8562957f01 100644
--- a/src/EditorFeatures/CSharpTest/InlineDeclaration/CSharpInlineDeclarationTests.cs
+++ b/src/EditorFeatures/CSharpTest/InlineDeclaration/CSharpInlineDeclarationTests.cs
@@ -1161,6 +1161,40 @@ public static void Method(Expression<Action> expression)
     {
 
     }
+}");
+        }
+
+        [WorkItem(16198, "https://github.com/dotnet/roslyn/issues/16198")]
+        [Fact, Trait(Traits.Feature, Traits.Features.CodeActionsInlineDeclaration)]
+        public async Task TestIndentation1()
+        {
+            await TestAsync(
+@"
+using System;
+
+class C
+{
+    private int Bar()
+    {
+        IProjectRuleSnapshot [|unresolvedReferenceSnapshot|] = null;
+        var itemType = GetUnresolvedReferenceItemType(originalItemSpec,
+                                                      updatedUnresolvedSnapshots,
+                                                      catalogs,
+                                                      out unresolvedReferenceSnapshot);
+    }
+}",
+@"
+using System;
+
+class C
+{
+    private int Bar()
+    {
+        var itemType = GetUnresolvedReferenceItemType(originalItemSpec,
+                                                      updatedUnresolvedSnapshots,
+                                                      catalogs,
+                                                      out IProjectRuleSnapshot unresolvedReferenceSnapshot);
+    }
 }");
         }
     }
diff --git a/src/Features/CSharp/Portable/InlineDeclaration/CSharpInlineDeclarationCodeFixProvider.cs b/src/Features/CSharp/Portable/InlineDeclaration/CSharpInlineDeclarationCodeFixProvider.cs
index ca4adc2e2a9e4db7598e223ee006500460506dc3..bcf0e32e28845dab9d929be4afe84010640824d8 100644
--- a/src/Features/CSharp/Portable/InlineDeclaration/CSharpInlineDeclarationCodeFixProvider.cs
+++ b/src/Features/CSharp/Portable/InlineDeclaration/CSharpInlineDeclarationCodeFixProvider.cs
@@ -92,16 +92,14 @@ public override Task RegisterCodeFixesAsync(CodeFixContext context)
                 var block = (BlockSyntax)localDeclarationStatement.Parent;
                 var declarationIndex = block.Statements.IndexOf(localDeclarationStatement);
 
-                // Comments on the local declaration will move to the next statement.  Format it
-                // so that it the comments show up properly.
+                // Trivia on the local declaration will move to the next statement.
+                // use the callback form as the next statement may be hte place where we're 
+                // inlining the declaration, and thus need to see the effects of that change.
                 editor.ReplaceNode(
                     block.Statements[declarationIndex + 1],
-                    (s, g) => s.WithAdditionalAnnotations(Formatter.Annotation));
+                    (s, g) => MoveNonIndentationTrivia(localDeclarationStatement, s));
 
-                var removeOptions = localDeclarationStatement.GetTrailingTrivia().Any(t => t.IsRegularComment())
-                    ? SyntaxRemoveOptions.KeepLeadingTrivia | SyntaxRemoveOptions.KeepTrailingTrivia
-                    : SyntaxRemoveOptions.KeepLeadingTrivia;
-                editor.RemoveNode(localDeclarationStatement, removeOptions);
+                editor.RemoveNode(localDeclarationStatement, SyntaxRemoveOptions.KeepUnbalancedDirectives);
             }
             else
             {
@@ -165,6 +163,30 @@ public override Task RegisterCodeFixesAsync(CodeFixContext context)
             editor.ReplaceNode(identifier, declarationExpression);
         }
 
+        private static SyntaxNode MoveNonIndentationTrivia(
+            SyntaxNode from, SyntaxNode to)
+        {
+            // get all the preceding trivia from the 'from' node, not counting the leading
+            // indentation trivia is has.
+            var finalTrivia = from.GetLeadingTrivia().ToList();
+            while (finalTrivia.Count > 0 && finalTrivia.Last().Kind() == SyntaxKind.WhitespaceTrivia)
+            {
+                finalTrivia.RemoveAt(finalTrivia.Count - 1);
+            }
+
+            // Also, add on hte trailing trivia if there are trailing comments.
+            var hasTrailingComments = from.GetTrailingTrivia().Any(t => t.IsRegularComment());
+            if (hasTrailingComments)
+            {
+                finalTrivia.AddRange(from.GetTrailingTrivia());
+            }
+
+            // Merge this trivia with the existing trivia on the node.  Format in case
+            // we added comments and need them indented properly.
+            return to.WithPrependedLeadingTrivia(finalTrivia)
+                     .WithAdditionalAnnotations(Formatter.Annotation);
+        }
+
         private static DeclarationExpressionSyntax GetDeclarationExpression(
             SourceText sourceText, IdentifierNameSyntax identifier,
             TypeSyntax newType, VariableDeclaratorSyntax declaratorOpt)