diff --git a/wtxmgr/kahnsort_test.go b/wtxmgr/kahnsort_test.go
new file mode 100644
index 0000000..770e651
--- /dev/null
+++ b/wtxmgr/kahnsort_test.go
@@ -0,0 +1,148 @@
+package wtxmgr_test
+
+import (
+	"math/rand"
+	"reflect"
+	"testing"
+
+	"github.com/btcsuite/btcd/chaincfg/chainhash"
+	"github.com/btcsuite/btcd/wire"
+	"github.com/btcsuite/btcwallet/wtxmgr"
+)
+
+// createTx is a helper method to create random transactions that spend
+// particular inputs.
+func createTx(t *testing.T, numOutputs int, inputs ...wire.OutPoint) *wire.MsgTx {
+	t.Helper()
+
+	tx := wire.NewMsgTx(1)
+	if len(inputs) == 0 {
+		tx.AddTxIn(&wire.TxIn{})
+	} else {
+		for _, input := range inputs {
+			tx.AddTxIn(&wire.TxIn{PreviousOutPoint: input})
+		}
+	}
+	for i := 0; i < numOutputs; i++ {
+		var pkScript [32]byte
+		if _, err := rand.Read(pkScript[:]); err != nil {
+			t.Fatal(err)
+		}
+
+		tx.AddTxOut(&wire.TxOut{
+			Value:    rand.Int63(),
+			PkScript: pkScript[:],
+		})
+	}
+
+	return tx
+}
+
+// getOutPoint returns the outpoint for the output with the given index in the
+// transaction.
+func getOutPoint(tx *wire.MsgTx, index uint32) wire.OutPoint {
+	return wire.OutPoint{Hash: tx.TxHash(), Index: index}
+}
+
+// TestDependencySort ensures that transactions are topologically sorted by
+// their dependency order under multiple scenarios. A transaction (a) can depend
+// on another (b) as long as (a) spends an output created in (b).
+func TestDependencySort(t *testing.T) {
+	t.Parallel()
+
+	tests := []struct {
+		name string
+
+		// setup is in charge of setting the dependency graph and
+		// returning the transactions in their expected sorted order.
+		setup func(t *testing.T) []*wire.MsgTx
+	}{
+		{
+			name: "single dependency chain",
+			setup: func(t *testing.T) []*wire.MsgTx {
+				// a -> b -> c
+				a := createTx(t, 1)
+				b := createTx(t, 1, getOutPoint(a, 0))
+				c := createTx(t, 1, getOutPoint(b, 0))
+				return []*wire.MsgTx{a, b, c}
+			},
+		},
+		{
+			name: "double dependency chain",
+			setup: func(t *testing.T) []*wire.MsgTx {
+				// a -> b
+				// a -> c
+				// c -> d
+				// d -> b
+				a := createTx(t, 2)
+				c := createTx(t, 1, getOutPoint(a, 1))
+				d := createTx(t, 1, getOutPoint(c, 0))
+				b := createTx(t, 1, getOutPoint(a, 0), getOutPoint(d, 0))
+				return []*wire.MsgTx{a, c, d, b}
+			},
+		},
+		{
+			name: "multi dependency chain",
+			setup: func(t *testing.T) []*wire.MsgTx {
+				// a -> e
+				// a -> c
+				// e -> c
+				// c -> g
+				// a -> b
+				// g -> b
+				// e -> f
+				// c -> f
+				// g -> f
+				// b -> f
+				// b -> d
+				// f -> d
+				a := createTx(t, 3)
+
+				a0 := getOutPoint(a, 0)
+				e := createTx(t, 2, a0)
+
+				a1 := getOutPoint(a, 1)
+				e0 := getOutPoint(e, 0)
+				c := createTx(t, 2, a1, e0)
+
+				c0 := getOutPoint(c, 0)
+				g := createTx(t, 2, c0)
+
+				a2 := getOutPoint(a, 2)
+				g0 := getOutPoint(g, 0)
+				b := createTx(t, 1, a2, g0)
+
+				e1 := getOutPoint(e, 1)
+				c1 := getOutPoint(c, 1)
+				g1 := getOutPoint(g, 1)
+				b0 := getOutPoint(b, 0)
+				f := createTx(t, 1, e1, c1, g1, b0)
+
+				f0 := getOutPoint(f, 0)
+				d := createTx(t, 1, b0, f0)
+
+				return []*wire.MsgTx{a, e, c, g, b, f, d}
+			},
+		},
+	}
+
+	for _, test := range tests {
+		test := test
+		t.Run(test.name, func(t *testing.T) {
+			t.Parallel()
+
+			exp := test.setup(t)
+
+			txSet := make(map[chainhash.Hash]*wire.MsgTx, len(exp))
+			for _, tx := range exp {
+				txSet[tx.TxHash()] = tx
+			}
+
+			sortedTxs := wtxmgr.DependencySort(txSet)
+
+			if !reflect.DeepEqual(sortedTxs, exp) {
+				t.Fatalf("expected %v, got %v", exp, sortedTxs)
+			}
+		})
+	}
+}