--- app_macro.c.orig	2008-08-22 10:03:05.000000000 -0700
+++ app_macro.c	2008-08-22 11:30:55.000000000 -0700
@@ -404,10 +404,13 @@
 		chan->priority++;
   	}
 	out:
-	/* Reset the depth back to what it was when the routine was entered (like if we called Macro recursively) */
+	/* Reset the depth back to what it was when the routine was entered (like if we called Macro recursively) 
+	   even if the channel is dead, since the channel variables may be inheritted in a device side transfer
+	   where a new channel is created so the depth should be reset back otherwise it leads to failures
+	*/
 	snprintf(depthc, sizeof(depthc), "%d", depth);
+	pbx_builtin_setvar_helper(chan, "MACRO_DEPTH", depthc);
 	if (!dead) {
-		pbx_builtin_setvar_helper(chan, "MACRO_DEPTH", depthc);
 		ast_set2_flag(chan, autoloopflag, AST_FLAG_IN_AUTOLOOP);
 	}