diff --git a/test/misc/Makefile b/test/misc/Makefile
index e761b1e3e..e77d37b29 100644
--- a/test/misc/Makefile
+++ b/test/misc/Makefile
@@ -58,14 +58,6 @@ $(ISEQUAL): ../isequal.c | $(WORKDIR)
 
 define PRG_template
 
-# should compile, but gives an error
-$(WORKDIR)/bug1252.$1.$2.prg: bug1252.c | $(WORKDIR)
-	@echo "FIXME: " $$@ "currently does not compile."
-	$(if $(QUIET),echo misc/bug1252.$1.$2.prg)
-	$(CC65) -t sim$2 -$1 -o $$@ $$< $(NULLERR)
-	$(NOT) $(CA65) -t sim$2 -o $$(@:.prg=.o) $$(@:.prg=.s) $(NULLERR)
-#	$(NOT) $(LD65) -t sim$2 -o $$@ $$(@:.prg=.o) sim$2.lib $(NULLERR)
-
 # should compile, but gives an error
 $(WORKDIR)/bug1768.$1.$2.prg: bug1768.c | $(WORKDIR)
 	@echo "FIXME: " $$@ "currently does not compile."
diff --git a/test/misc/bug1252.c b/test/misc/bug1252.c
deleted file mode 100644
index 599aa064b..000000000
--- a/test/misc/bug1252.c
+++ /dev/null
@@ -1,19 +0,0 @@
-
-#include <stdlib.h>
-
-int main(void)
-{
-// this works
-c_label:
-  asm("inx\n"
-      "bne %g\n",
-      c_label);
-
-// this does not work
-c_label2:
-  asm("inx\n"
-      "bne %g        \n",
-      c_label2);
-
-    return EXIT_SUCCESS;
-}
diff --git a/test/val/bug1252.c b/test/val/bug1252.c
new file mode 100644
index 000000000..ab4fd21fc
--- /dev/null
+++ b/test/val/bug1252.c
@@ -0,0 +1,45 @@
+
+// bug #1252 - inline asm: cc65 chokes on label ref if space/tab follows
+
+#include <stdlib.h>
+
+int main(void)
+{
+// first test the recommended way to use labels in inline assembly:
+
+// this works
+c_label:
+  asm("inx\n"
+      "bne %g\n",
+      c_label);
+
+// this does not work
+c_label2:
+  asm("inx\n"
+      "bne %g        \n",
+      c_label2);
+
+// now the following is from the original bug report. note that using labels
+// this way only works by chance - the name of the label may clash with
+// generated labels
+
+// this works
+  asm("label1: inx\n"
+      "bne label1\n");
+
+// this does not work
+  asm("label2: inx\n"
+      "bne label2        \n");
+
+// a variant of the above using local labels.
+
+// this works
+  asm("@label1: inx\n"
+      "bne @label1\n");
+
+// this does not work
+  asm("@label2: inx\n"
+      "bne @label2        \n");
+
+    return EXIT_SUCCESS;
+}