Picture in Picture effect

Im fairly new to Final Cut Pro X...Im trying to do a Picture in Picture effect. For the picture inside the picture, how do you remove unwanted background. I provided a photo below. I tried using the crop tool, but it only makes my photo smaller. This is the effect/look I am trying to achieve... Any links or infor would be appreciated... Thanks.

What you are looking to use is a MASK that hides the unwanted area. Since you are using a static image you may also find a photo editor to be quicker than learning a mask tool, YMMV. Erasing the unwanted parts of the image and saving it as a .PNG file you can import it into FCPX and the erased areas will remain transparent. Set the photo ABOVE the timeline and the timeline video will only show through those erased areas.

Thank you for this infor....! What is YMMV...? Is this a photo editing program....? Is there a link?

It's just a shortcut (acronym) for Your Mileage May Vary. Depending on your expertise with Photoshop or another image editor, if you are using a still photo it's probably easier to do the masking there instead of in a video editor.

If you have control over what's being filmed, another approach would be to do this with green screen - that would allow for doing this with video as well as with a still photo. The FCPX keyer is a real strong point of the software.

Thank you....I will try the mask in Final Cut!!

Or look for "SliceX" from CoreMelt.