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Before reading this, I took the image from my "Avatars/Icons" Tutorial. If you need to know how to make a Icon, it's best you read that first.

First I am going to open up the document I made and the one i want there to be a transparency spot. File->Open. Double click the layer the image is on and click ok. You Should get a window that looks like the one below. Write Image where it says "Layer 0".



Next I need to select the, well make the shape I want to be transparent. I want it to be a Heart. I'm going to create a new layer. On the new layer I will add the heart shape. To add a shape to the new layer click and hold down the mouse over the rectangle tool.



Select the custom shape tool. The tool bar at the top should then change. It will look like this:



See the dark black diamond? Thats where you can select the shape you want, I will select the Heart. The shape you have however may, and will most likely be a different shape. On the new layer I will draw the heart to the size I want.



Next we want to select the image with the magic wand tool. With the image selected it should look similar to this:



Next, Select the layer named image(or whatever layer you have your image on) and click Delete on the keyboard. Next you want to delete the layer with the heart on it, Next go to file and save for web, make sure its on 128 gif no dither, also make sure the transparency is checked.



My finished product:



I added an effect known as stroke which outlines the image on that layer, I had it a black 1px stroke. You can Add effects by double clicking the layer (but try not to click the name of the layer or you'll get that to pop up and not the effects)

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