diff --git a/src/harness/unittests/extractMethods.ts b/src/harness/unittests/extractMethods.ts
index 6d8eed3b8b041..190cd1d5be0bc 100644
--- a/src/harness/unittests/extractMethods.ts
+++ b/src/harness/unittests/extractMethods.ts
@@ -768,6 +768,11 @@ function parsePrimaryExpression(): any {
             }
         }|]
     }
+}`);
+        // Selection excludes leading trivia of declaration
+        testExtractMethod("extractMethod33",
+            `function F() {
+    [#|function G() { }|]
 }`);
     });
 
diff --git a/src/services/refactors/extractMethod.ts b/src/services/refactors/extractMethod.ts
index 3b8ea19a9f00e..8551ea2eddccf 100644
--- a/src/services/refactors/extractMethod.ts
+++ b/src/services/refactors/extractMethod.ts
@@ -1209,7 +1209,7 @@ namespace ts.refactor.extractMethod {
             if (!declInFile) {
                 return undefined;
             }
-            if (rangeContainsRange(enclosingTextRange, declInFile)) {
+            if (rangeContainsStartEnd(enclosingTextRange, declInFile.getStart(), declInFile.end)) {
                 // declaration is located in range to be extracted - do nothing
                 return undefined;
             }
diff --git a/tests/baselines/reference/extractMethod/extractMethod33.ts b/tests/baselines/reference/extractMethod/extractMethod33.ts
new file mode 100644
index 0000000000000..79a6626a535c2
--- /dev/null
+++ b/tests/baselines/reference/extractMethod/extractMethod33.ts
@@ -0,0 +1,19 @@
+// ==ORIGINAL==
+function F() {
+    function G() { }
+}
+// ==SCOPE::inner function in function 'F'==
+function F() {
+    /*RENAME*/newFunction();
+
+    function newFunction() {
+        function G() { }
+    }
+}
+// ==SCOPE::function in global scope==
+function F() {
+    /*RENAME*/newFunction();
+}
+function newFunction() {
+    function G() { }
+}
diff --git a/tests/cases/fourslash/extract-method-empty-namespace.ts b/tests/cases/fourslash/extract-method-empty-namespace.ts
index 9da3faaf92704..3a29992350df5 100644
--- a/tests/cases/fourslash/extract-method-empty-namespace.ts
+++ b/tests/cases/fourslash/extract-method-empty-namespace.ts
@@ -1,8 +1,5 @@
 /// <reference path='fourslash.ts' />
 
-// TODO: GH#18546
-// For now this tests that at least we don't crash.
-
 ////function f() {
 ////    /*start*/namespace N {}/*end*/
 ////}
@@ -13,9 +10,9 @@ edit.applyRefactor({
     actionName: "scope_1",
     actionDescription: "Extract to function in global scope",
     newContent: `function f() {
-    /*RENAME*/newFunction(N);
+    /*RENAME*/newFunction();
 }
-function newFunction(N: any) {
+function newFunction() {
     namespace N { }
 }
 `