diff --git a/subsys/net/ip/net_context.c b/subsys/net/ip/net_context.c
index 3a3942c2d061b..997bbea8478a9 100644
--- a/subsys/net/ip/net_context.c
+++ b/subsys/net/ip/net_context.c
@@ -94,7 +94,8 @@ static enum net_verdict packet_received(struct net_conn *conn,
 static void set_appdata_values(struct net_pkt *pkt, enum net_ip_protocol proto);
 
 #if defined(CONFIG_NET_TCP)
-static int send_reset(struct net_context *context, struct sockaddr *remote);
+static int send_reset(struct net_context *context, struct sockaddr *local,
+		      struct sockaddr *remote);
 
 static struct tcp_backlog_entry {
 	struct net_tcp *tcp;
@@ -112,7 +113,12 @@ static void backlog_ack_timeout(struct k_work *work)
 
 	NET_DBG("Did not receive ACK in %dms", ACK_TIMEOUT);
 
-	send_reset(backlog->tcp->context, &backlog->remote);
+	/* TODO: If net_context is bound to unspecified IPv6 address
+	 * and some port number, local address is not available.
+	 * RST packet might be invalid. Cache local address
+	 * and use it in RST message preparation.
+	 */
+	send_reset(backlog->tcp->context, NULL, &backlog->remote);
 
 	memset(backlog, 0, sizeof(struct tcp_backlog_entry));
 }
@@ -199,6 +205,9 @@ static int tcp_backlog_syn(struct net_pkt *pkt, struct net_context *context,
 	ret = net_pkt_get_src_addr(pkt, &tcp_backlog[empty_slot].remote,
 				   sizeof(tcp_backlog[empty_slot].remote));
 	if (ret < 0) {
+		/* Release the assigned empty slot */
+		tcp_backlog[empty_slot].tcp = NULL;
+
 		return ret;
 	}
 
@@ -1080,12 +1089,13 @@ static int send_ack(struct net_context *context,
 }
 
 static int send_reset(struct net_context *context,
+		      struct sockaddr *local,
 		      struct sockaddr *remote)
 {
 	struct net_pkt *pkt = NULL;
 	int ret;
 
-	ret = net_tcp_prepare_reset(context->tcp, remote, &pkt);
+	ret = net_tcp_prepare_reset(context->tcp, local, remote, &pkt);
 	if (ret || !pkt) {
 		return ret;
 	}
@@ -1203,7 +1213,6 @@ NET_CONN_CB(tcp_established)
 			/* Received FIN on FIN_WAIT1, so cancel the timer */
 			k_delayed_work_cancel(&context->tcp->fin_timer);
 			/* Active close: step to FIN_WAIT_2 */
-			k_delayed_work_cancel(&context->tcp->fin_timer);
 			net_tcp_change_state(context->tcp, NET_TCP_FIN_WAIT_2);
 		} else if (net_tcp_get_state(context->tcp)
 			   == NET_TCP_LAST_ACK) {
@@ -1362,7 +1371,7 @@ NET_CONN_CB(tcp_synack_received)
 				       &context->conn_handler);
 		if (ret < 0) {
 			NET_DBG("Cannot register TCP handler (%d)", ret);
-			send_reset(context, &remote_addr);
+			send_reset(context, &local_addr, &remote_addr);
 			return NET_DROP;
 		}
 
@@ -1845,7 +1854,7 @@ NET_CONN_CB(tcp_syn_rcvd)
 	net_stats_update_tcp_seg_conndrop();
 
 reset:
-	send_reset(tcp->context, &remote_addr);
+	send_reset(tcp->context, &local_addr, &remote_addr);
 
 	return NET_DROP;
 }
diff --git a/subsys/net/ip/tcp.c b/subsys/net/ip/tcp.c
index cf2cdaeaeff74..1f7c0417dfdcb 100644
--- a/subsys/net/ip/tcp.c
+++ b/subsys/net/ip/tcp.c
@@ -661,12 +661,37 @@ int net_tcp_prepare_ack(struct net_tcp *tcp, const struct sockaddr *remote,
 	return -EINVAL;
 }
 
+static inline void copy_sockaddr_to_sockaddr_ptr(struct net_tcp *tcp,
+						 const struct sockaddr *local,
+						 struct sockaddr_ptr *addr)
+{
+	memset(addr, 0, sizeof(struct sockaddr_ptr));
+
+#if defined(CONFIG_NET_IPV4)
+	if (local->sa_family == AF_INET) {
+		net_sin_ptr(addr)->sin_family = AF_INET;
+		net_sin_ptr(addr)->sin_port = net_sin(local)->sin_port;
+		net_sin_ptr(addr)->sin_addr = &net_sin(local)->sin_addr;
+	}
+#endif
+
+#if defined(CONFIG_NET_IPV6)
+	if (local->sa_family == AF_INET6) {
+		net_sin6_ptr(addr)->sin6_family = AF_INET6;
+		net_sin6_ptr(addr)->sin6_port = net_sin6(local)->sin6_port;
+		net_sin6_ptr(addr)->sin6_addr = &net_sin6(local)->sin6_addr;
+	}
+#endif
+}
+
 int net_tcp_prepare_reset(struct net_tcp *tcp,
+			  const struct sockaddr *local,
 			  const struct sockaddr *remote,
 			  struct net_pkt **pkt)
 {
 	struct tcp_segment segment = { 0 };
 	int status = 0;
+	struct sockaddr_ptr src_addr_ptr;
 
 	if ((net_context_get_state(tcp->context) != NET_CONTEXT_UNCONNECTED) &&
 	    (net_tcp_get_state(tcp) != NET_TCP_SYN_SENT) &&
@@ -675,7 +700,15 @@ int net_tcp_prepare_reset(struct net_tcp *tcp,
 		segment.ack = tcp->send_ack;
 		segment.flags = NET_TCP_RST | NET_TCP_ACK;
 		segment.seq = tcp->send_seq;
-		segment.src_addr = &tcp->context->local;
+
+		if (!local) {
+			segment.src_addr = &tcp->context->local;
+		} else {
+			copy_sockaddr_to_sockaddr_ptr(tcp, local,
+						      &src_addr_ptr);
+			segment.src_addr = &src_addr_ptr;
+		}
+
 		segment.dst_addr = remote;
 		segment.wnd = 0;
 		segment.options = NULL;
@@ -961,32 +994,14 @@ bool net_tcp_ack_received(struct net_context *ctx, u32_t ack)
 		valid_ack = true;
 	}
 
-	/* No need to re-send stuff we are closing down */
+	/* Restart the timer on a valid inbound ACK.  This isn't quite the
+	 * same behavior as per-packet retry timers, but is close in practice
+	 * (it starts retries one timer period after the connection
+	 * "got stuck") and avoids the need to track per-packet timers or
+	 * sent times.
+	 */
 	if (valid_ack && net_tcp_get_state(tcp) == NET_TCP_ESTABLISHED) {
-		/* Restart the timer on a valid inbound ACK.  This
-		 * isn't quite the same behavior as per-packet retry
-		 * timers, but is close in practice (it starts retries
-		 * one timer period after the connection "got stuck")
-		 * and avoids the need to track per-packet timers or
-		 * sent times.
-		 */
 		restart_timer(ctx->tcp);
-
-		/* And, if we had been retrying, mark all packets
-		 * untransmitted and then resend them.  The stalled
-		 * pipe is uncorked again.
-		 */
-		if (ctx->tcp->flags & NET_TCP_RETRYING) {
-			SYS_SLIST_FOR_EACH_CONTAINER(&ctx->tcp->sent_list, pkt,
-						     sent_list) {
-				if (net_pkt_sent(pkt)) {
-					do_ref_if_needed(ctx->tcp, pkt);
-					net_pkt_set_sent(pkt, false);
-				}
-			}
-
-			net_tcp_send_data(ctx);
-		}
 	}
 
 	return true;
diff --git a/subsys/net/ip/tcp.h b/subsys/net/ip/tcp.h
index fe892a3c4e742..6ed2d4f94fd58 100644
--- a/subsys/net/ip/tcp.h
+++ b/subsys/net/ip/tcp.h
@@ -302,12 +302,15 @@ int net_tcp_prepare_ack(struct net_tcp *tcp, const struct sockaddr *remote,
  * @brief Prepare a TCP RST message that can be send to peer.
  *
  * @param tcp TCP context
+ * @param local Source address
  * @param remote Peer address
  * @param pkt Network buffer
  *
  * @return 0 if ok, < 0 if error
  */
-int net_tcp_prepare_reset(struct net_tcp *tcp, const struct sockaddr *remote,
+int net_tcp_prepare_reset(struct net_tcp *tcp,
+			  const struct sockaddr *local,
+			  const struct sockaddr *remote,
 			  struct net_pkt **pkt);
 
 typedef void (*net_tcp_cb_t)(struct net_tcp *tcp, void *user_data);