diff --git a/ide/customformeditor.pp b/ide/customformeditor.pp
index e2935ccb32..453f8a5f51 100644
--- a/ide/customformeditor.pp
+++ b/ide/customformeditor.pp
@@ -246,10 +246,13 @@ each control that's dropped onto the form
     function CreateChildComponentFromStream(BinStream: TStream;
                        ComponentClass: TComponentClass; Root: TComponent;
                        ParentControl: TWinControl): TIComponentInterface; override;
+    procedure WriterFindAncestor(Writer: TWriter; Component: TComponent;
+                                 const Name: string;
+                                 var Ancestor, RootAncestor: TComponent);
     procedure SetComponentNameAndClass(CI: TIComponentInterface;
-      const NewName, NewClassName: shortstring);
+                                       const NewName, NewClassName: shortstring);
     function GetDescendantTypeClass(TypeClass: TComponentClass): TComponentClass;
-      
+
     // ancestors
     function GetAncestorLookupRoot(AComponent: TComponent): TComponent; override;
     function GetAncestorInstance(AComponent: TComponent): TComponent; override;
@@ -1355,11 +1358,8 @@ begin
     try
       BinCompStream.Position:=0;
       Writer:=CreateLRSWriter(BinCompStream,DestroyDriver);
-      AncestorUnitInfo:=AnUnitInfo.FindAncestorUnit;
-      Ancestor:=nil;
-      if AncestorUnitInfo<>nil then
-        Ancestor:=AncestorUnitInfo.Component;
-      Writer.WriteDescendent(AnUnitInfo.Component,Ancestor);
+      Writer.OnFindAncestor:=@WriterFindAncestor;
+      Writer.WriteDescendent(AnUnitInfo.Component,nil);
       if DestroyDriver then Writer.Driver.Free;
       FreeAndNil(Writer);
       AnUnitInfo.ComponentLastBinStreamSize:=BinCompStream.Size;
@@ -1728,6 +1728,30 @@ begin
   Result:=CreateComponentInterface(NewComponent,true);
 end;
 
+procedure TCustomFormEditor.WriterFindAncestor(Writer: TWriter;
+  Component: TComponent; const Name: string; var Ancestor,
+  RootAncestor: TComponent);
+// Note: TWriter wants the stream ancestor, which is not always the class ancestor
+var
+  AnUnitInfo: TUnitInfo;
+begin
+  //DebugLn(['TCustomFormEditor.WriterFindAncestor START ',DbgSName(Component)]);
+  AnUnitInfo:=Project1.UnitWithComponentClass(TComponentClass(Component.ClassType));
+  if (AnUnitInfo<>nil) then begin
+    if (AnUnitInfo.Component=Component) then begin
+      // Component is a root component (e.g. not nested, inline)
+      // the stream ancestor is the component of the ClassParent
+      AnUnitInfo:=AnUnitInfo.FindAncestorUnit;
+    end else begin
+      // Component is a nested, inline component
+      // the stream ancestor is the component of the class
+    end;
+    if (AnUnitInfo<>nil) and (AnUnitInfo.Component<>nil) then
+      Ancestor:=AnUnitInfo.Component;
+    DebugLn(['TCustomFormEditor.WriterFindAncestor Component=',DbgSName(Component),' Ancestor=',DbgSName(Ancestor)]);
+  end;
+end;
+
 procedure TCustomFormEditor.SetComponentNameAndClass(CI: TIComponentInterface;
   const NewName, NewClassName: shortstring);
 var
diff --git a/ide/main.pp b/ide/main.pp
index 30d4cf2495..6c368fab7e 100644
--- a/ide/main.pp
+++ b/ide/main.pp
@@ -4648,8 +4648,6 @@ var
   CompResourceCode, LFMFilename, TestFilename, ResTestFilename: string;
   UnitSaveFilename: String;
   ADesigner: TDesigner;
-  AncestorUnit: TUnitInfo;
-  AncestorInstance: TComponent;
   Grubber: TLRTGrubber;
   LRTFilename: String;
 begin
@@ -4699,13 +4697,9 @@ begin
           {$IFNDEF DisableFakeMethods}
           Writer.OnWriteMethodProperty:=@FormEditor1.WriteMethodPropertyEvent;
           {$ENDIF}
-          AncestorUnit:=GetAncestorUnit(AnUnitInfo);
-          if AncestorUnit<>nil then
-            AncestorInstance:=AncestorUnit.Component
-          else
-            AncestorInstance:=nil;
           //DebugLn(['TMainIDE.DoSaveUnitComponent AncestorInstance=',dbgsName(AncestorInstance)]);
-          Writer.WriteDescendent(AnUnitInfo.Component,AncestorInstance);
+          Writer.OnFindAncestor:=@FormEditor1.WriterFindAncestor;
+          Writer.WriteDescendent(AnUnitInfo.Component,nil);
           if DestroyDriver then Writer.Driver.Free;
           FreeAndNil(Writer);
           AnUnitInfo.ComponentLastBinStreamSize:=BinCompStream.Size;