diff --git a/java/java-analysis-impl/src/com/intellij/codeInspection/deadCode/UnusedDeclarationInspectionBase.java b/java/java-analysis-impl/src/com/intellij/codeInspection/deadCode/UnusedDeclarationInspectionBase.java
index 3c03a892ec2c..e8af11c737bb 100644
--- a/java/java-analysis-impl/src/com/intellij/codeInspection/deadCode/UnusedDeclarationInspectionBase.java
+++ b/java/java-analysis-impl/src/com/intellij/codeInspection/deadCode/UnusedDeclarationInspectionBase.java
@@ -594,6 +594,7 @@ public class UnusedDeclarationInspectionBase extends GlobalInspectionTool {
     private final Map<RefClass, Set<RefMethod>> myClassIDtoMethods = new HashMap<>();
     private final Set<RefClass> myInstantiatedClasses = new HashSet<>();
     private int myInstantiatedClassesCount;
+    private final Set<RefClass> myProcessedClasses = new HashSet<>();
     private final Set<RefMethod> myProcessedMethods = new HashSet<>();
     private final Set<RefFunctionalExpression> myProcessedFunctionalExpressions = new HashSet<>();
     private final Stack<RefElement> myNextRound = new Stack<>();
@@ -646,15 +647,13 @@ public class UnusedDeclarationInspectionBase extends GlobalInspectionTool {
     }
 
     @Override public void visitClass(@NotNull RefClass refClass) {
-      boolean alreadyActive = refClass.isReachable();
-      ((RefClassImpl)refClass).setReachable(true);
-
-      if (!alreadyActive) {
+      if (myProcessedClasses.add(refClass)) {
+        ((RefClassImpl)refClass).setReachable(true);
         // Process class's static initializers.
         makeReachable(refClass);
-      }
 
-      addInstantiatedClass(refClass);
+        addInstantiatedClass(refClass);
+      }
     }
 
     @Override public void visitField(@NotNull RefField field) {
diff --git a/java/java-tests/testData/inspection/deadCode/annotationInitializedByInheritedClassReference/expected.xml b/java/java-tests/testData/inspection/deadCode/annotationInitializedByInheritedClassReference/expected.xml
new file mode 100644
index 000000000000..d704d58ed391
--- /dev/null
+++ b/java/java-tests/testData/inspection/deadCode/annotationInitializedByInheritedClassReference/expected.xml
@@ -0,0 +1,4 @@
+<?xml version="1.0" encoding="UTF-8"?>
+<problems>
+</problems>
+
diff --git a/java/java-tests/testData/inspection/deadCode/annotationInitializedByInheritedClassReference/src/AnnotationsUtil.java b/java/java-tests/testData/inspection/deadCode/annotationInitializedByInheritedClassReference/src/AnnotationsUtil.java
new file mode 100644
index 000000000000..48e0557eff20
--- /dev/null
+++ b/java/java-tests/testData/inspection/deadCode/annotationInitializedByInheritedClassReference/src/AnnotationsUtil.java
@@ -0,0 +1,20 @@
+import java.lang.annotation.*;
+
+public class AnnotationsUtil {
+  @Inherited
+  @Retention(RetentionPolicy.RUNTIME)
+  @Target(ElementType.TYPE)
+  private @interface PerClassLifeCycle {
+  }
+
+  @PerClassLifeCycle
+  private static class BaseMetaAnnotatedTestCase {
+  }
+
+  private static class SpecializedTestCase extends BaseMetaAnnotatedTestCase {
+  }
+
+  public static void main(String[] args) {
+    System.out.println(SpecializedTestCase.class);
+  }
+}
\ No newline at end of file
diff --git a/java/java-tests/testSrc/com/intellij/java/codeInspection/UnusedDeclarationInspectionTest.java b/java/java-tests/testSrc/com/intellij/java/codeInspection/UnusedDeclarationInspectionTest.java
index d9c8c8d9e996..eb058e84961e 100644
--- a/java/java-tests/testSrc/com/intellij/java/codeInspection/UnusedDeclarationInspectionTest.java
+++ b/java/java-tests/testSrc/com/intellij/java/codeInspection/UnusedDeclarationInspectionTest.java
@@ -131,6 +131,10 @@ public class UnusedDeclarationInspectionTest extends AbstractUnusedDeclarationTe
     doTest();
   }
 
+  public void testAnnotationInitializedByInheritedClassReference() {
+    doTest();
+  }
+
   public void testUnusedEnum() {
     doTest5();
   }