Its best to keep your tests together in a project which relates to the project you are testing.
MyProject
MyProject.Tests
MyLibrary
MyLibrary.Tests
Obviously duplicating code is a bad thing. But I think its a bad sign that you are needing to duplicate code. You don't want to link these two test projects as they should both ruin independently and just be concerned about testing their project.
Lets assume that both projects use the same dependency though, and therefore both tests need to mock that dependency.
You might be tempted to put that mocking setup in a common library. But I would regard that as a code smell. Do both tests really need the exact same setup? surely we are testing different behaviour.
However, Maybe you have an in memory version of the dependency which you use for mocking. That of course would go in its own library. which would perhaps be shared and uses as a mock in both test projects.
The thinking there being that The in-memory version is a real thing in of itself and the bespoke setup logic would still be contained in each test project.