read from source file one line at a time and write to target file one line at time.

def copy(src_file, target_file):
    with open(src_file) as fin:
        with open(target_file, 'w') as fout:
            while True:
                line = fin.readline()
                if not line:
                    break
                fout.write(line)


copy('source.txt', 'target.txt')