fix: ensure tsconfig lookups and parsing work as expected

.gitignore

@@ -2,5 +2,7 @@ node_modules
 yarn.lock
 !test/fixtures/project/node_modules
 test/fixtures/project/node_modules/.cache
+!test/fixtures/typescript/extends-module/node_modules
+test/fixtures/typescript/extends-module/node_modules/.cache
 .nyc_output
 coverage

lib/options-manager.js

@@ -2,6 +2,7 @@ import {existsSync, promises as fs} from 'node:fs';
 import process from 'node:process';
 import os from 'node:os';
 import path from 'node:path';
+import {createRequire} from 'node:module';
 import arrify from 'arrify';
 import {mergeWith, flow, pick} from 'lodash-es';
 import {findUpSync} from 'find-up';
@@ -643,11 +644,10 @@ async function recursiveBuildTsConfig(tsConfig, tsConfigPath) {
 	}
 
 	// If any of the following are missing, then we need to look up the base config as it could apply
-	const basePath = path.isAbsolute(tsConfig.extends)
-		? tsConfig.extends
-		: path.resolve(path.dirname(tsConfigPath), tsConfig.extends);
-
-	const baseTsConfig = await readJson(basePath);
+	// Use node resolution
+	const require = createRequire(tsConfigPath);
+	const basePath = require.resolve(tsConfig.extends);
+	const baseTsConfig = JSON5.parse(await fs.readFile(basePath));
 
 	delete tsConfig.extends;
 

test/fixtures/typescript/extends-module/package.json

@@ -0,0 +1,3 @@
+{
+	"xo": {}
+}

test/fixtures/typescript/extends-module/tsconfig.json

@@ -0,0 +1,3 @@
+{
+	"extends": "@sindresorhus/tsconfig"
+}

test/options-manager.js

@@ -671,6 +671,15 @@ test('mergeWithFileConfig: creates temp tsconfig if none present', async t => {
 	t.deepEqual(options.tsConfig, TSCONFIG_DEFAULTS);
 });
 
+test('mergeWithFileConfig: tsconfig can properly extend configs in node_modules', async t => {
+	const cwd = path.resolve('fixtures', 'typescript', 'extends-module');
+	const expectedConfigPath = path.join(cwd, 'tsconfig.json');
+	const filePath = path.resolve(cwd, 'does-not-matter.ts');
+	await t.notThrowsAsync(manager.mergeWithFileConfig({cwd, filePath}));
+	const {options} = await manager.mergeWithFileConfig({cwd, filePath});
+	t.is(options.tsConfigPath, expectedConfigPath);
+});
+
 test('applyOverrides', t => {
 	t.deepEqual(
 		manager.applyOverrides(