diff --git a/python/src/com/jetbrains/python/editor/PythonCopyPasteProcessor.java b/python/src/com/jetbrains/python/editor/PythonCopyPasteProcessor.java
index 43cc03571d08..91b9fb7778ea 100644
--- a/python/src/com/jetbrains/python/editor/PythonCopyPasteProcessor.java
+++ b/python/src/com/jetbrains/python/editor/PythonCopyPasteProcessor.java
@@ -64,7 +64,8 @@ public class PythonCopyPasteProcessor implements CopyPastePreProcessor {
     final int lineStartOffset = getLineStartSafeOffset(document, lineNumber);
 
     text = addLeadingSpaces(text, NOT_INDENT_FILTER, indentSize, indentChar);
-    final String indentText = getIndentText(file, document, caretOffset, lineNumber);
+    int firstLineIndent = StringUtil.findFirst(text, NOT_INDENT_FILTER);
+    final String indentText = getIndentText(file, document, caretOffset, lineNumber, firstLineIndent);
 
     int toRemove = calculateIndentToRemove(text, NOT_INDENT_FILTER);
     if (StringUtil.isEmptyOrSpaces(indentText) && isApplicable(file, text, caretOffset)) {
@@ -105,7 +106,7 @@ public class PythonCopyPasteProcessor implements CopyPastePreProcessor {
   private static String getIndentText(@NotNull final PsiFile file,
                                       @NotNull final Document document,
                                       int caretOffset,
-                                      int lineNumber) {
+                                      int lineNumber, int firstLineIndent) {
 
     PsiElement nonWS = PyUtil.findNextAtOffset(file, caretOffset, PsiWhiteSpace.class);
     if (nonWS != null) {
@@ -132,6 +133,8 @@ public class PythonCopyPasteProcessor implements CopyPastePreProcessor {
           indentText = strings.get(0);
         }
       }
+      if (indentText.length() == firstLineIndent)
+        return "";
     }
     return indentText;
   }
@@ -141,7 +144,7 @@ public class PythonCopyPasteProcessor implements CopyPastePreProcessor {
     int minIndent = StringUtil.findFirst(text, filter);
     for (String  s : strings) {
       final int indent = StringUtil.findFirst(s, filter);
-      if (indent < minIndent)
+      if (indent < minIndent && !StringUtil.isEmptyOrSpaces(s))
         minIndent = indent;
     }
     return minIndent;
diff --git a/python/testData/copyPaste/CaretAtTheBeginningOfIndent.after.py b/python/testData/copyPaste/CaretAtTheBeginningOfIndent.after.py
new file mode 100644
index 000000000000..9f86fdf7e2f6
--- /dev/null
+++ b/python/testData/copyPaste/CaretAtTheBeginningOfIndent.after.py
@@ -0,0 +1,16 @@
+# original function  # this is line 1 of the code.
+def foo():
+    print 'f00'
+    def bar(num):
+        for _ in range(num):
+            print 'bar'
+
+    bar(7)
+
+
+def bar(num):
+    for _ in range(num):
+        print 'bar'
+
+
+bar(7)
diff --git a/python/testData/copyPaste/CaretAtTheBeginningOfIndent.dst.py b/python/testData/copyPaste/CaretAtTheBeginningOfIndent.dst.py
new file mode 100644
index 000000000000..ec09360aaeec
--- /dev/null
+++ b/python/testData/copyPaste/CaretAtTheBeginningOfIndent.dst.py
@@ -0,0 +1,10 @@
+# original function  # this is line 1 of the code.
+def foo():
+    print 'f00'
+    def bar(num):
+        for _ in range(num):
+            print 'bar'
+
+    bar(7)
+
+<caret>    <selection></selection>
diff --git a/python/testData/copyPaste/CaretAtTheBeginningOfIndent.src.py b/python/testData/copyPaste/CaretAtTheBeginningOfIndent.src.py
new file mode 100644
index 000000000000..5492edd65dd7
--- /dev/null
+++ b/python/testData/copyPaste/CaretAtTheBeginningOfIndent.src.py
@@ -0,0 +1,7 @@
+# original function  # this is line 1 of the code.
+def foo():
+    print 'f00'
+    <selection>def bar(num):
+        for _ in range(num):
+            print 'bar'
+    bar(7)</selection><caret>
diff --git a/python/testData/copyPaste/EmptyLineInList.after.py b/python/testData/copyPaste/EmptyLineInList.after.py
new file mode 100644
index 000000000000..9f86fdf7e2f6
--- /dev/null
+++ b/python/testData/copyPaste/EmptyLineInList.after.py
@@ -0,0 +1,16 @@
+# original function  # this is line 1 of the code.
+def foo():
+    print 'f00'
+    def bar(num):
+        for _ in range(num):
+            print 'bar'
+
+    bar(7)
+
+
+def bar(num):
+    for _ in range(num):
+        print 'bar'
+
+
+bar(7)
diff --git a/python/testData/copyPaste/EmptyLineInList.dst.py b/python/testData/copyPaste/EmptyLineInList.dst.py
new file mode 100644
index 000000000000..ec09360aaeec
--- /dev/null
+++ b/python/testData/copyPaste/EmptyLineInList.dst.py
@@ -0,0 +1,10 @@
+# original function  # this is line 1 of the code.
+def foo():
+    print 'f00'
+    def bar(num):
+        for _ in range(num):
+            print 'bar'
+
+    bar(7)
+
+<caret>    <selection></selection>
diff --git a/python/testData/copyPaste/EmptyLineInList.src.py b/python/testData/copyPaste/EmptyLineInList.src.py
new file mode 100644
index 000000000000..e9bd47cec7ae
--- /dev/null
+++ b/python/testData/copyPaste/EmptyLineInList.src.py
@@ -0,0 +1,8 @@
+# original function  # this is line 1 of the code.
+def foo():
+    print 'f00'
+    <selection>def bar(num):
+        for _ in range(num):
+            print 'bar'
+
+    bar(7)</selection><caret>
diff --git a/python/testSrc/com/jetbrains/python/PyCopyPasteTest.java b/python/testSrc/com/jetbrains/python/PyCopyPasteTest.java
index 62e1f216f1e9..2c80ef0f696e 100644
--- a/python/testSrc/com/jetbrains/python/PyCopyPasteTest.java
+++ b/python/testSrc/com/jetbrains/python/PyCopyPasteTest.java
@@ -301,6 +301,14 @@ public class PyCopyPasteTest extends PyTestCase {
     doTest();
   }
 
+  public void testEmptyLineInList() {
+    doTest();
+  }
+
+  public void testCaretAtTheBeginningOfIndent() {
+    doTest();
+  }
+
   private void doTestTabs() {
     final CommonCodeStyleSettings.IndentOptions indentOptions =
       CodeStyleSettingsManager.getSettings(myFixture.getProject()).getIndentOptions(PythonFileType.INSTANCE);