Open your image in Photoshop.

Use the clone tool by holding down option, then clicking the spot you want to clone. 

Use the brush of the clone tool to paint over the watermark. Caution: You will need to continually need to change the original cloning spot to be accurate. 

If it looks repetitive or sloppy you can use the healing brush tool and the blur tool.  

    Color and sharpen as needed and save!

This can also be done with any other editing program with a cloning tool such as Pixlr.

File> Import> Video Frames to Layers and select your video

Use the slider to select the part of the video to gif. Optional: Set it to "Limit to Every 2 Frames" (the lesser number of frames the better the quality) Click OK.

Make sure that your timeline is visible, if not, go to Window> Timeline and make sure it is checked.

Select all the layers in the timeline (click on the first frame>hold shift while clicking the last frame). Then click on the seconds, then click "Other.." 

Set the number of seconds to anything between 0.05-0.09 it all depends on the video, you usually can base it off the original time. (ex. this video was originally 0.04 so I set it to 0.09, but if it was set originally at 0.02 I would set it around 0.06)

Click on "Convert to video timeline". 

It should now look like this: 

Select all layers on the right and then go to Filter>Convert to Smart Filters.

Go to Image> Image Size and resize your gif. (for gif sets: 250px; for one gif: 500px)

Color and sharpen as needed.

Go to Save> Save for Web... 

Make sure you set the Looping Options to "Forever" and make sure it's set on "Pattern".

Click on the top right button and chose "Optimize to File Size". 

Set it to 1 MB (1000K) because Tumblr will not upload gifs over 1 MB. Caution: Do not make gifs over 1.5 MB because when you compress it, it reduces the quality greatly.

Save and upload to Tumblr!

If you have any questions, please don't hesitate to ask.

Step #1:

Download Quicktime player, you will need this to screen record your video you want to use! Afterwards, open up the application and press new screen recording!

When you are done recording, click on the application and press stop screen recording. Save the video. 

Step #2:

Next we are going to open the video in Photoshop!

Simply just press open, find your video, click on it, and it will show up! I personally do not import video layers because I use the timeline!

Step #3:

So you are going to need to go through the video and find the area that you want to gif, when you get there(make sure to use the red and blue bar to move through the video) click on the three vertical line icon in the right corner, then go to work area, start playhead.

Step #4:

After you find where you want your gif to end, again using the red and blue bar, go back to the three vertical line icon, go to work area, and then press "set end of playhead." So, at this point you technically have a gif made. Your gif timeline should look something like this: 

Step #5:

So this step is kind of optional, but if you would like to, this is the time to edit your gif! You can edit your gif just like any other picture with contrast, vibrance, gradient maps, etc. You also apply PSDs the same way as well.

Step #6:

When you are done editing and making your gif you will want to save it! Go to the top: press file and then go to save for web, click on it. Make sure your gif is set on pattern, and is on forever. After this is done, press save!

Additional Steps (kind of necessary):

After you save your gif, you need to reopen it, and this time in will be in frames, but that is okay. Go to the bar icon on the right again, scroll down to "select all frames," then select the arrow on one of the frames, and change the time! (it will be the arrow next to the .02 & and make sure to press other so you can type in the time you want to change it to) The timing depends on what you are trying to do, but I suggest .05-.07! Whichever looks best!