diff --git a/v2/engine/function.c b/v2/engine/function.c
index 78d5f223c..b871f2c37 100644
--- a/v2/engine/function.c
+++ b/v2/engine/function.c
@@ -2167,19 +2167,18 @@ static void compile_parse( PARSE * parse, compiler * c, int result_location )
     }
     else if( parse->type == PARSE_IF )
     {
-        int nested_result = result_location == RESULT_NONE? RESULT_NONE : RESULT_RETURN;
         int f = compile_new_label( c );
         /* Emit the condition */
         compile_condition( parse->left, c, 0, f );
         /* Emit the if block */
-        compile_parse( parse->right, c, nested_result );
-        if ( parse->third->type != PARSE_NULL )
+        compile_parse( parse->right, c, result_location );
+        if ( parse->third->type != PARSE_NULL || result_location != RESULT_NONE )
         {
             /* Emit the else block */
             int end = compile_new_label( c );
             compile_emit_branch( c, INSTR_JUMP, end );
             compile_set_label( c, f );
-            compile_parse( parse->third, c, nested_result );
+            compile_parse( parse->third, c, result_location );
             compile_set_label( c, end );
         }
         else
@@ -2187,7 +2186,6 @@ static void compile_parse( PARSE * parse, compiler * c, int result_location )
             compile_set_label( c, f );
         }
 
-        adjust_result( c, nested_result, result_location);
     }
     else if( parse->type == PARSE_WHILE )
     {
diff --git a/v2/test/core-language/test.jam b/v2/test/core-language/test.jam
index d0f493f8e..6b8b307bb 100644
--- a/v2/test/core-language/test.jam
+++ b/v2/test/core-language/test.jam
@@ -359,6 +359,61 @@ else
 
 check-order if-else-false : r2 ;
 
+rule test-rule
+{
+    if true
+    {
+        return result ;
+    }
+}
+
+check-equal if-true-result : [ test-rule ] : result ;
+
+rule test-rule
+{
+    local idx  = 1 2 ;
+    local values = true ;
+    while $(idx)
+    {
+        local v = $(values[$(idx[1])]) ;
+        idx = $(idx[2-]) ;
+        if $(v)
+        {
+            return result ;
+        }
+    }
+}
+
+check-equal if-false-result : [ test-rule ] : ;
+
+rule test-rule
+{
+    if true
+    {
+        return r1 ;
+    }
+    else
+    {
+        return r2 ;
+    }
+}
+
+check-equal if-else-true-result : [ test-rule ] : r1 ;
+
+rule test-rule
+{
+    if $(false)
+    {
+        return r1 ;
+    }
+    else
+    {
+        return r2 ;
+    }
+}
+
+check-equal if-else-false-result : [ test-rule ] : r2 ;
+
 }
 
 # Check the evaluation of conditions