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the following image is not allowing the letters to minus in the blue background, it doesn't do anything. I want it to take on the color of the shirt. Any advice is appreciated!
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Are you wanting the red text to actually be the shirt color? If so, then just change them to a white fill.
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but aren't I able to remove it from the background? that way when I seperate by color the background blue will not print where the letters are.
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If you color the text white, the background blue will not print where the white is.
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Did you create outlines or is it still live text? Create outlines.
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makin' waves,
If you wish to keep the live Type, you can just do what Megan said, or if you really want transparency you can turn the Type black and use it as an Opacity Mask with default Clip and Invert mask settings.
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How did you create the texture in the blue? It looks like it might be an image, not vector. Pathfinders do not work on images.