diff --git a/changes/bug27795 b/changes/bug27795
new file mode 100644
index 0000000000..43bb1ba16a
--- /dev/null
+++ b/changes/bug27795
@@ -0,0 +1,5 @@
+  o Major bugfixes (socket accounting):
+    - In our socket accounting code, count a socket as closed even
+      when it is closed indirectly by the TLS layer. Previously, we
+      would count these sockets as still in use, and incorrectly believe that
+      we had run out of sockets. Fixes bug 27795; bugfix on 0.3.5.1-alpha.
diff --git a/src/core/mainloop/connection.c b/src/core/mainloop/connection.c
index 0c3abc8442..b0cb5322c3 100644
--- a/src/core/mainloop/connection.c
+++ b/src/core/mainloop/connection.c
@@ -646,6 +646,7 @@ connection_free_minimal(connection_t *conn)
       } else {
         /* The tor_tls_free() call below will close the socket; we must tell
          * the code below not to close it a second time. */
+        tor_release_socket_ownership(conn->s);
         conn->s = TOR_INVALID_SOCKET;
       }
       tor_tls_free(or_conn->tls);