diff --git a/python/src/com/jetbrains/python/psi/impl/PyReferenceExpressionImpl.java b/python/src/com/jetbrains/python/psi/impl/PyReferenceExpressionImpl.java
index cbdd6201b172..44d01c834d75 100644
--- a/python/src/com/jetbrains/python/psi/impl/PyReferenceExpressionImpl.java
+++ b/python/src/com/jetbrains/python/psi/impl/PyReferenceExpressionImpl.java
@@ -273,7 +273,7 @@ public class PyReferenceExpressionImpl extends PyElementImpl implements PyRefere
   @Nullable
   public static PyType getTypeFromTarget(@NotNull final PsiElement target,
                                          final TypeEvalContext context,
-                                         @Nullable PyReferenceExpression anchor) {
+                                         PyReferenceExpression anchor) {
     final PyType pyType = getReferenceTypeFromProviders(target, context, anchor);
     if (pyType != null) {
       return pyType;
diff --git a/python/src/com/jetbrains/python/psi/impl/PyTargetExpressionImpl.java b/python/src/com/jetbrains/python/psi/impl/PyTargetExpressionImpl.java
index ea0e16f9f9df..f590353f5860 100644
--- a/python/src/com/jetbrains/python/psi/impl/PyTargetExpressionImpl.java
+++ b/python/src/com/jetbrains/python/psi/impl/PyTargetExpressionImpl.java
@@ -155,7 +155,7 @@ public class PyTargetExpressionImpl extends PyPresentableElementImpl<PyTargetExp
               if (target == this || target == null) {
                 return null;  // fix SOE on "a = a"
               }
-              final PyType typeFromTarget = PyReferenceExpressionImpl.getTypeFromTarget(target, context, null);
+              final PyType typeFromTarget = PyReferenceExpressionImpl.getTypeFromTarget(target, context, refex);
               if (target instanceof PyTargetExpression && typeFromTarget instanceof PyNoneType) {
                 // this usually means that the variable is initialized to a non-None value somewhere else where we haven't looked
                 return null;
diff --git a/python/testSrc/com/jetbrains/python/PyTypeTest.java b/python/testSrc/com/jetbrains/python/PyTypeTest.java
index b4e5837aba02..7406e8399f28 100644
--- a/python/testSrc/com/jetbrains/python/PyTypeTest.java
+++ b/python/testSrc/com/jetbrains/python/PyTypeTest.java
@@ -237,11 +237,29 @@ public class PyTypeTest extends PyLightFixtureTestCase {
     assertInstanceOf(t, PyTypeReference.class);
   }
 
+  public void testIsInstance() {
+      doTest("str",
+             "def f(c):\n" +
+             "    def g():\n" +
+             "        '''\n" +
+             "        :rtype: int or str\n" +
+             "        '''\n" +
+             "    x = g()\n" +
+             "    if isinstance(x, str):\n" +
+             "        expr = x");
+  }
+
   private PyExpression parseExpr(String text) {
     myFixture.configureByText(PythonFileType.INSTANCE, text);
     return myFixture.findElementByText("expr", PyExpression.class);
   }
 
+  private static String msg(PyType expected, PyType actual, TypeEvalContext context) {
+    return String.format("Expected: %s, actual: %s",
+                         PythonDocumentationProvider.getTypeName(expected, context),
+                         PythonDocumentationProvider.getTypeName(actual, context));
+  }
+
   private void doTest(final String expectedType, final String text) {
     PyExpression expr = parseExpr(text);
     TypeEvalContext context = TypeEvalContext.slow().withTracing();