Also included: how to add graduated transparency and layer effects to the cut-outs.
SelectLayer>New>Layer from Background.
punch in a name for the layer and selectOK.

punch theShapes tooland selectCustom Shape Tool.
Select a custom shape for your cut-out in the tool options bar.
Draw the shape in the approximate location where you want the shape tocrop your picture.

The shape will cover the chosen area of the picture.
In theLayerspalette, swap the order of the layers by dragging the shape layer below the picture layer.
If the Layers palette isn’t visible, selectWindow>Layerto open it.

Right -hit the picture layer in theLayerspalette and selectCreate Clipping Mask.
In older versions of Photoshop, this command is calledGroup with previous.
The picture layer is cropped to the shape below it.

Draw the shape in the approximate location where you want it tocrop your picture.
The shape will cover up your picture.
Right-pick the picture layer in theLayerspalette and selectCreate Clipping Mask.

You also need to ensure that the source program supports your chosen format withtransparency.
If you want to preserve the layers for possible editing later, save a copy in thePSD format.
you’ve got the option to then paste your cutout into another document.

you might then drag the smart object into another Photoshop document.
Areas that are transparent in the clipping mask layer make those areas transparent in the layer above.
If your clipping mask layer contains graduated transparency, then the layer above also has graduated transparency.

In Photoshop Elements, the command isSimplify Layer.
Go toFilter>Blur>Gaussian Blur.
Set theRadiusto a high number such as30andthen selectOK.

Notice the edges of your picture now fade out.













