diff --git a/src/components/MoneyRequestReportView/MoneyRequestReportTransactionItem.tsx b/src/components/MoneyRequestReportView/MoneyRequestReportTransactionItem.tsx
index 6ed8a8ce984..8f16707f6c0 100644
--- a/src/components/MoneyRequestReportView/MoneyRequestReportTransactionItem.tsx
+++ b/src/components/MoneyRequestReportView/MoneyRequestReportTransactionItem.tsx
@@ -129,7 +129,7 @@ function MoneyRequestReportTransactionItem({
         onEditAmount,
         onEditTag,
         wasEditingOnMouseDownRef,
-    } = useTransactionInlineEdit({transactionID: transaction.transactionID, reportID: transaction.reportID});
+    } = useTransactionInlineEdit({transactionID: transaction.transactionID});
 
     const viewRef = useRef<View>(null);
 
diff --git a/src/components/Search/SearchList/ListItem/TransactionListItem.tsx b/src/components/Search/SearchList/ListItem/TransactionListItem.tsx
index 3483e2075d7..39cbfca4f22 100644
--- a/src/components/Search/SearchList/ListItem/TransactionListItem.tsx
+++ b/src/components/Search/SearchList/ListItem/TransactionListItem.tsx
@@ -175,8 +175,6 @@ function TransactionListItem<TItem extends ListItem>({
     const {isDelegateAccessRestricted} = useDelegateNoAccessState();
     const {showDelegateNoAccessModal} = useDelegateNoAccessActions();
 
-    const transactionID = transactionItem.transactionID;
-
     const {isEditingCell, wasRecentlyEditingCell} = useEditingCellState();
     const [shouldDisableHoverStyle, setShouldDisableHoverStyle] = useState(false);
 
@@ -205,12 +203,9 @@ function TransactionListItem<TItem extends ListItem>({
         onEditTag,
         wasEditingOnMouseDownRef,
     } = useTransactionInlineEdit({
-        transactionID,
-        reportID: transactionItem.reportID,
-        reportActionID: transactionItem.reportAction?.reportActionID,
-        parentReportAction,
+        transactionID: transactionItem.transactionID,
         hash: currentSearchHash,
-        fallbackReport: snapshotReport,
+        linkedReportAction: transactionItem.reportAction,
     });
 
     const handleOnPress = () => {
diff --git a/src/hooks/useTransactionInlineEdit.ts b/src/hooks/useTransactionInlineEdit.ts
index 508d01f3972..734d186cfc5 100644
--- a/src/hooks/useTransactionInlineEdit.ts
+++ b/src/hooks/useTransactionInlineEdit.ts
@@ -4,7 +4,7 @@
  * than being duplicated across every surface that renders a transaction.
  */
 import {useCallback, useRef} from 'react';
-// eslint-disable-next-line no-restricted-imports -- Need original useOnyx to avoid reading partial Search snapshot policy data.
+// eslint-disable-next-line no-restricted-imports -- Need original useOnyx to avoid reading partial Search snapshot policy data
 import {useOnyx as originalUseOnyx} from 'react-native-onyx';
 import type {OnyxEntry} from 'react-native-onyx';
 import {useSearchStateContext} from '@components/Search/SearchContext';
@@ -23,28 +23,14 @@ import {getIOUActionForTransactionID} from '@libs/ReportActionsUtils';
 import {isExpenseUnreported, isPerDiemRequest} from '@libs/TransactionUtils';
 import CONST from '@src/CONST';
 import ONYXKEYS from '@src/ONYXKEYS';
-import type {Report, ReportAction, ReportActions} from '@src/types/onyx';
+import type {ReportAction, ReportActions} from '@src/types/onyx';
 import useOnyx from './useOnyx';
 import usePolicyForMovingExpenses from './usePolicyForMovingExpenses';
 import usePolicyForTransaction from './usePolicyForTransaction';
+import useSelfDMReport from './useSelfDMReport';
 
 type UseTransactionInlineEditParams = {
     transactionID: string;
-    reportID: string | undefined;
-
-    /**
-     * When provided the action is looked up directly by ID (faster).
-     * If omitted, the hook scans all actions for the one matching this transaction.
-     * Ignored when `parentReportAction` is supplied directly.
-     */
-    reportActionID?: string;
-
-    /**
-     * Pre-fetched parent report action.
-     * When provided the hook skips its own Onyx subscription entirely, avoiding
-     * a duplicate subscription in components that already hold this data.
-     */
-    parentReportAction?: OnyxEntry<ReportAction>;
 
     /**
      * Search snapshot hash.
@@ -54,11 +40,11 @@ type UseTransactionInlineEditParams = {
     hash?: number;
 
     /**
-     * Fallback report from the search snapshot.
-     * Used when the Onyx report cache is empty (e.g. after cache clear) so that
-     * permission checks like isSettled still have a report object with statusNum.
+     * Lightweight report action hint from the current surface.
+     * Search rows already have this in snapshot data, which lets the hook avoid
+     * scanning all report actions just to recover the thread/report action IDs.
      */
-    fallbackReport?: OnyxEntry<Report>;
+    linkedReportAction?: OnyxEntry<ReportAction>;
 };
 
 type UseTransactionInlineEditReturn = {
@@ -82,39 +68,37 @@ type UseTransactionInlineEditReturn = {
     wasEditingOnMouseDownRef: React.RefObject<boolean>;
 };
 
-function useTransactionInlineEdit({
-    transactionID,
-    reportID,
-    reportActionID,
-    parentReportAction: externalParentReportAction,
-    hash,
-    fallbackReport,
-}: UseTransactionInlineEditParams): UseTransactionInlineEditReturn {
-    // Look up the parent IOU report action from live Onyx. If the caller already
-    // knows the action ID we can select it directly; otherwise we scan all actions.
-    // When the caller supplies `parentReportAction` directly we still must call
-    // useOnyx (rules of hooks) but we ignore its result and prefer the external value.
+function useTransactionInlineEdit({transactionID, hash, linkedReportAction}: UseTransactionInlineEditParams): UseTransactionInlineEditReturn {
+    const [transaction] = useOnyx(`${ONYXKEYS.COLLECTION.TRANSACTION}${transactionID}`);
+
+    const reportID = transaction?.reportID;
+    const isUnreported = isExpenseUnreported(transaction);
+    const selfDMReport = useSelfDMReport();
+
+    const [parentReport] = useOnyx(`${ONYXKEYS.COLLECTION.REPORT}${getNonEmptyStringOnyxID(reportID)}`);
+    const effectiveParentReport = isUnreported ? selfDMReport : parentReport;
+    const effectiveParentReportID = effectiveParentReport?.reportID;
+
+    const linkedReportActionID = linkedReportAction?.reportActionID;
+
     const parentReportActionSelector = useCallback(
-        (reportActions: ReportActions | undefined) => (reportActionID ? reportActions?.[reportActionID] : getIOUActionForTransactionID(Object.values(reportActions ?? {}), transactionID)),
-        [reportActionID, transactionID],
+        (reportActions: ReportActions | undefined) =>
+            linkedReportActionID ? reportActions?.[linkedReportActionID] : getIOUActionForTransactionID(Object.values(reportActions ?? {}), transactionID),
+        [linkedReportActionID, transactionID],
     );
-
-    const [internalParentReportAction] = useOnyx(`${ONYXKEYS.COLLECTION.REPORT_ACTIONS}${getNonEmptyStringOnyxID(reportID)}`, {
+    const [resolvedParentReportAction] = useOnyx(`${ONYXKEYS.COLLECTION.REPORT_ACTIONS}${getNonEmptyStringOnyxID(effectiveParentReportID)}`, {
         selector: parentReportActionSelector,
     });
+    const parentReportAction = resolvedParentReportAction ?? linkedReportAction;
 
-    const [transaction] = useOnyx(`${ONYXKEYS.COLLECTION.TRANSACTION}${transactionID}`);
-    const [parentReport] = useOnyx(`${ONYXKEYS.COLLECTION.REPORT}${getNonEmptyStringOnyxID(reportID)}`);
-
-    const parentReportAction = externalParentReportAction !== undefined ? externalParentReportAction : internalParentReportAction;
+    const transactionThreadReportID = linkedReportAction?.childReportID ?? parentReportAction?.childReportID ?? transaction?.transactionThreadReportID;
 
-    const transactionThreadReportID = parentReportAction?.childReportID;
-    const chatReportID = parentReport?.chatReportID;
+    const chatReportID = effectiveParentReport?.chatReportID;
 
     // For unreported expenses (SelfDM), use active policy to show policy-specific fields like categories and tags.
     const [activePolicyID] = useOnyx(ONYXKEYS.NVP_ACTIVE_POLICY_ID);
-    const reportPolicyID = parentReport?.policyID;
-    const policyID = isExpenseUnreported(transaction) ? activePolicyID : reportPolicyID;
+    const reportPolicyID = effectiveParentReport?.policyID;
+    const policyID = isUnreported ? activePolicyID : reportPolicyID;
 
     const {policy} = usePolicyForTransaction({
         transaction,
@@ -131,7 +115,7 @@ function useTransactionInlineEdit({
     const [chatReportNVP] = useOnyx(`${ONYXKEYS.COLLECTION.REPORT_NAME_VALUE_PAIRS}${getNonEmptyStringOnyxID(chatReportID)}`);
     const [policyRecentlyUsedCategories] = useOnyx(`${ONYXKEYS.COLLECTION.POLICY_RECENTLY_USED_CATEGORIES}${getNonEmptyStringOnyxID(policyID)}`);
     const [policyRecentlyUsedTags] = useOnyx(`${ONYXKEYS.COLLECTION.POLICY_RECENTLY_USED_TAGS}${getNonEmptyStringOnyxID(policyID)}`);
-    const [parentReportNextStep] = useOnyx(`${ONYXKEYS.COLLECTION.NEXT_STEP}${getNonEmptyStringOnyxID(reportID)}`);
+    const [parentReportNextStep] = useOnyx(`${ONYXKEYS.COLLECTION.NEXT_STEP}${getNonEmptyStringOnyxID(effectiveParentReportID)}`);
     // Use original Onyx here because the useOnyx wrapper can read partial Search snapshot policy data instead of the full policy object.
     const [completePolicy] = originalUseOnyx(`${ONYXKEYS.COLLECTION.POLICY}${getNonEmptyStringOnyxID(policyID)}`);
 
@@ -146,9 +130,9 @@ function useTransactionInlineEdit({
     const permissions = getTransactionEditPermissions({
         transaction,
         parentReportAction,
-        parentReport: parentReport ?? fallbackReport,
+        parentReport: effectiveParentReport,
         policy: completePolicy ?? policy,
-        transactionThreadReport: transactionThreadReport ?? parentReport ?? fallbackReport,
+        transactionThreadReport,
         policyCategories,
         policyTags,
         transactionThreadNVP,
@@ -164,8 +148,9 @@ function useTransactionInlineEdit({
         return {
             hash,
             transactionID,
-            parentReport: parentReport ?? fallbackReport,
-            transactionThreadReport: transactionThreadReport ?? parentReport ?? fallbackReport,
+            parentReport: effectiveParentReport,
+            parentReportAction,
+            transactionThreadReport,
             policy: completePolicy ?? policy,
             policyCategories,
             policyTags,
diff --git a/src/libs/actions/TransactionInlineEdit.ts b/src/libs/actions/TransactionInlineEdit.ts
index 9537b8dd4a5..5cceae03eb2 100644
--- a/src/libs/actions/TransactionInlineEdit.ts
+++ b/src/libs/actions/TransactionInlineEdit.ts
@@ -14,11 +14,12 @@ import {getIsOffline} from '@libs/NetworkState';
 import {hasEnabledOptions} from '@libs/OptionsListUtils';
 import Permissions from '@libs/Permissions';
 import {getTagLists, isMultiLevelTags} from '@libs/PolicyUtils';
-import {isMoneyRequestAction} from '@libs/ReportActionsUtils';
+import {getIOUActionForTransactionID, isMoneyRequestAction} from '@libs/ReportActionsUtils';
 import {
     canEditFieldOfMoneyRequest,
     canEditMoneyRequest,
     canUserPerformWriteAction,
+    findSelfDMReportID,
     isArchivedReport,
     isInvoiceReport,
     isIOUReport,
@@ -31,6 +32,7 @@ import CONST from '@src/CONST';
 import ONYXKEYS from '@src/ONYXKEYS';
 import type {
     Beta,
+    IntroSelected,
     Policy,
     PolicyCategories,
     PolicyTagLists,
@@ -38,6 +40,7 @@ import type {
     RecentlyUsedTags,
     Report,
     ReportAction,
+    ReportActions,
     ReportNameValuePairs,
     ReportNextStepDeprecated,
     Transaction,
@@ -51,6 +54,7 @@ import {
     updateMoneyRequestMerchant,
     updateMoneyRequestTag,
 } from './IOU/UpdateMoneyRequest';
+import {createTransactionThreadReport} from './Report';
 
 type TransactionEditPermissions = {
     canEditDate: boolean;
@@ -79,6 +83,24 @@ Onyx.connectWithoutView({
     },
 });
 
+let allReports: NonNullable<OnyxCollection<Report>> = {};
+Onyx.connectWithoutView({
+    key: ONYXKEYS.COLLECTION.REPORT,
+    waitForCollectionCallback: true,
+    callback: (value) => {
+        allReports = value ?? {};
+    },
+});
+
+let allReportActions: NonNullable<OnyxCollection<ReportActions>> = {};
+Onyx.connectWithoutView({
+    key: ONYXKEYS.COLLECTION.REPORT_ACTIONS,
+    waitForCollectionCallback: true,
+    callback: (value) => {
+        allReportActions = value ?? {};
+    },
+});
+
 let currentUserAccountID: number = CONST.DEFAULT_NUMBER_ID;
 let currentUserEmail = '';
 Onyx.connectWithoutView({
@@ -97,6 +119,14 @@ Onyx.connectWithoutView({
     },
 });
 
+let introSelected: OnyxEntry<IntroSelected>;
+Onyx.connectWithoutView({
+    key: ONYXKEYS.NVP_INTRO_SELECTED,
+    callback: (value) => {
+        introSelected = value;
+    },
+});
+
 const NO_EDIT: Readonly<TransactionEditPermissions> = Object.freeze({
     canEditDate: false,
     canEditMerchant: false,
@@ -137,6 +167,7 @@ type TransactionEditPermissionsParams = {
 type GetIouParamsInput = {
     transactionID: string;
     parentReport: OnyxEntry<Report>;
+    parentReportAction: OnyxEntry<ReportAction>;
     transactionThreadReport: OnyxEntry<Report>;
     policy: OnyxEntry<Policy>;
     policyCategories: OnyxEntry<PolicyCategories>;
@@ -160,6 +191,7 @@ type TransactionInlineEditParams = GetIouParamsInput & {
 function getIouParamsForTransaction({
     transactionID,
     parentReport,
+    parentReportAction,
     transactionThreadReport,
     policy,
     policyCategories,
@@ -169,12 +201,56 @@ function getIouParamsForTransaction({
     parentReportNextStep,
 }: GetIouParamsInput) {
     const transaction = allTransactions[`${ONYXKEYS.COLLECTION.TRANSACTION}${transactionID}`];
+    const transactionViolations = allTransactionViolations[`${ONYXKEYS.COLLECTION.TRANSACTION_VIOLATIONS}${transactionID}`];
+    const isUnreportedExpense = !transaction?.reportID || transaction.reportID === CONST.REPORT.UNREPORTED_REPORT_ID;
+
+    let resolvedParentReport = parentReport;
+    if (!resolvedParentReport?.reportID && transaction?.reportID && transaction.reportID !== CONST.REPORT.UNREPORTED_REPORT_ID) {
+        resolvedParentReport = allReports[`${ONYXKEYS.COLLECTION.REPORT}${transaction.reportID}`];
+    }
+
+    let resolvedParentReportAction = parentReportAction;
+    if (!resolvedParentReportAction && resolvedParentReport?.reportID) {
+        const reportActions = allReportActions[`${ONYXKEYS.COLLECTION.REPORT_ACTIONS}${resolvedParentReport.reportID}`] ?? {};
+        resolvedParentReportAction = getIOUActionForTransactionID(Object.values(reportActions), transactionID);
+    }
+
+    if (isUnreportedExpense) {
+        const selfDMReportID = findSelfDMReportID(allReports);
+        if (selfDMReportID) {
+            resolvedParentReport = allReports[`${ONYXKEYS.COLLECTION.REPORT}${selfDMReportID}`] ?? resolvedParentReport;
+
+            if (!resolvedParentReportAction) {
+                const selfDMReportActions = allReportActions[`${ONYXKEYS.COLLECTION.REPORT_ACTIONS}${selfDMReportID}`] ?? {};
+                resolvedParentReportAction = getIOUActionForTransactionID(Object.values(selfDMReportActions), transactionID);
+            }
+        }
+    }
+
+    let resolvedTransactionThreadReport = transactionThreadReport;
+    const transactionThreadReportID = resolvedTransactionThreadReport?.reportID ?? transaction?.transactionThreadReportID ?? resolvedParentReportAction?.childReportID;
+
+    if (!resolvedTransactionThreadReport && transactionThreadReportID) {
+        resolvedTransactionThreadReport = allReports[`${ONYXKEYS.COLLECTION.REPORT}${transactionThreadReportID}`];
+    }
+
+    if (!resolvedTransactionThreadReport && resolvedParentReportAction && transaction) {
+        resolvedTransactionThreadReport = createTransactionThreadReport(
+            introSelected,
+            currentUserEmail,
+            currentUserAccountID,
+            allBetas,
+            resolvedParentReport,
+            resolvedParentReportAction,
+            transaction,
+            transactionViolations,
+        );
+    }
 
     return {
-        // Shared base fields — spread directly into any updateMoneyRequest* call
         transactionID,
-        transactionThreadReport,
-        parentReport,
+        transactionThreadReport: resolvedTransactionThreadReport,
+        parentReport: resolvedParentReport,
         policy,
         policyCategories,
         parentReportNextStep,