Photoshop Elements :: Cut Canvas Shapes?

Isn't it possible to (simply) cut out a random piece of the canvas, leaving an image that isn't square or rectangle?
 
For example, I had the image below posted online to sell these pants. I sold the bottom left pair, and tried for an hour to figure out how I could just cut out that corner, but was unsuccessful.I didn't want to erase or fill the spot, I wanted to cut it out completely, leaving a backward "L" shaped canvas.I can't believe this isn't possible, seems like it would be a very useful tool. I thought I could lasso any shape and cut it out, but the canvas remains a rectangular.I ended up filling the spot, but it's ugly - color sample was taken from carpet, but it filled with grey.