How to fix error “Transaction context in use by another session”?

When you create a linked server that is linked to the local server itself (loop back linked server) and your code/stored procedure attempt to use such linked server, you may receive below error in SQL 2005 system:

Msg 3910, Level 16, State 2, Line 1

Transaction context in use by another session.

This problem is acknowledged by Microsoft because of a design change in SQL 2005. You may use one of the below option to resolve this situation:

Option 1:
Modify your code to remove the linked server name. While this is perfect solution, it may not be always practical.

Option 2:
Microsoft released a hot fix to resolve this issue. (Cumulative Update 5 SP2). However I will recommend to apply SP3 directly as this fix is a part of SQL 2005 SP3.

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