diff --git a/pmd/etc/changelog.txt b/pmd/etc/changelog.txt
index 386f458043..40f7cf9664 100644
--- a/pmd/etc/changelog.txt
+++ b/pmd/etc/changelog.txt
@@ -8,6 +8,7 @@ Fixed bug 1989814 - false +: ConsecutiveLiteralAppends
 Fixed bug 1977230 - false positive: UselessOverridingMethod
 Fixed bug 1998185 - BeanMembersShouldSerialize vs @SuppressWarnings("serial")
 Fixed bug 2002722 - false + in UseStringBufferForStringAppends
+Fixed bug 2056318 - False positive for AvoidInstantiatingObjectsInLoops
 Optimizations and false positive fixes in PreserveStackTrace
 @SuppressWarnings("all") disables all warnings
 
diff --git a/pmd/regress/test/net/sourceforge/pmd/rules/optimizations/xml/AvoidInstantiatingObjectsInLoops.xml b/pmd/regress/test/net/sourceforge/pmd/rules/optimizations/xml/AvoidInstantiatingObjectsInLoops.xml
index e8e9cf632e..8d3d1a0554 100644
--- a/pmd/regress/test/net/sourceforge/pmd/rules/optimizations/xml/AvoidInstantiatingObjectsInLoops.xml
+++ b/pmd/regress/test/net/sourceforge/pmd/rules/optimizations/xml/AvoidInstantiatingObjectsInLoops.xml
@@ -88,6 +88,22 @@ public class Foo {
        return new String();
    }
  }
+}
+     ]]></code>
+    </test-code>
+    <test-code>
+        <description><![CDATA[
+[ 2056318 ] False positive for AvoidInstantiatingObjectsInLoops 
+     ]]></description>
+        <expected-problems>0</expected-problems>
+        <code><![CDATA[
+public class Foo {
+ public void test1() {
+   Object o;
+   int i;
+   for(o = new Object(), i = 0; i < 10; i++) {
+   }
+ }
 }
      ]]></code>
     </test-code>
diff --git a/pmd/src/net/sourceforge/pmd/rules/optimization/AvoidInstantiatingObjectsInLoops.java b/pmd/src/net/sourceforge/pmd/rules/optimization/AvoidInstantiatingObjectsInLoops.java
index c07487e4c9..8a90b9b9d3 100644
--- a/pmd/src/net/sourceforge/pmd/rules/optimization/AvoidInstantiatingObjectsInLoops.java
+++ b/pmd/src/net/sourceforge/pmd/rules/optimization/AvoidInstantiatingObjectsInLoops.java
@@ -5,10 +5,12 @@ package net.sourceforge.pmd.rules.optimization;
 
 import net.sourceforge.pmd.ast.ASTAllocationExpression;
 import net.sourceforge.pmd.ast.ASTDoStatement;
+import net.sourceforge.pmd.ast.ASTForInit;
 import net.sourceforge.pmd.ast.ASTForStatement;
 import net.sourceforge.pmd.ast.ASTReturnStatement;
 import net.sourceforge.pmd.ast.ASTThrowStatement;
 import net.sourceforge.pmd.ast.ASTWhileStatement;
+import net.sourceforge.pmd.ast.Node;
 
 public class AvoidInstantiatingObjectsInLoops extends AbstractOptimizationRule {
 
@@ -28,14 +30,21 @@ public class AvoidInstantiatingObjectsInLoops extends AbstractOptimizationRule {
     }
 
     private boolean insideLoop(ASTAllocationExpression node) {
-        if (node.getFirstParentOfType(ASTDoStatement.class) != null) {
-            return true;
-        }
-        if (node.getFirstParentOfType(ASTWhileStatement.class) != null) {
-            return true;
-        }
-        if (node.getFirstParentOfType(ASTForStatement.class) != null) {
-            return true;
+        Node n = node.jjtGetParent();
+        while (n != null) {
+            if (n instanceof ASTDoStatement ||
+                    n instanceof ASTWhileStatement ||
+                    n instanceof ASTForStatement) {
+                return true;
+            } else if (n instanceof ASTForInit) {
+                /*
+                 * init part is not technically inside the loop.
+                 * Skip parent ASTForStatement but continue higher
+                 * up to detect nested loops
+                 */
+                n = n.jjtGetParent();
+            }
+            n = n.jjtGetParent();
         }
         return false;
     }