Try this one with a very simple image the first time you do it, maybe something with a plain single colour background (like the image I have chosen to work with in this example).

Open your image in Photoshop.

 Grunge vintage television

 

 

 

 

 

 

 

 Increase your canvas size to double the length that it is now. (Image > Canvas Size - make sure your top middle anchor point is locked so that the canvas increases by adding to the bottom of the image)
reflection1

Right click your background layer in the layers menu and select Duplicate layer.

With your newly created layer selected - Select your magic eraser tool and with the tolerance level set high enough to eliminate your background cleanly - erase it bit by bit by clicking on the background pieces.

Then click Ctrl+A to select your whole cut out image. Then click Edit in the top menu > Transform > Flip vertical.

Select the move tool (the little arrow on your tool bar) and drag the newly flipped item to match up to the bottom layer item (sitting neatly and perfectly underneath it, just touching the bottom of the first item)

reflection2

Now add a layer mask to your top layer. At the bottom of the layers menu click on the little black square with the white circle in it. Then click on the white square that has appeared next to your image in the layers menu. You are now working on your layer mask.

 

Select your gradient tool from the tools menu and make sure your colours are set to default (click D)
With a Black to white gradient click on your image (about one third of the way from the bottom of the picture to just about the point where the two images meet up)

On your layer mask you will see a black to white fade appear and on your image the bottom piece will have changed from a solid image to a gently faded out image from the point of where the two pieces.

There you have it! A reflection.

Grunge vintage television

You can also create a new background layer and (Ctrl+Shift+N) and then drag the new layer so it sits underneath your other layers in the layer menu.

Now with your magic eraser selected and your main image layer selected - click on the background portions of that layer to clear out the background and reveal the new layer underneath it that you have just created.

Now click on your new background layer and make it funky.
Maybe a gradient or a texture?

You can crop your image to a better size by clicking your crop tool in the menu bar and selecting the portion of your canvas you want to keep.