Solution

1 Create a rounded rectangle using the Rounded Rectangle Tool (U) highlighted in this example. Be sure to use the Shape layers option in the option bar, not the Fill pixels option.

Creating a rounded rectangle

Choose the Convert Point Tool (P), which you'll find in the Pen Tool flyout menu. Click on the path to show the anchor points of the vector shape. These are represented by small white squares, as shown at right.

Click on each of the anchor points that make up the rounded corner you want to "straighten."

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Clicking on the anchor points with the Convert Point Tool

This will change the curve into a "cut" corner, as shown in the example below.

The result of using the Convert Point Tool

4 Select the Direct Selection Tool (4) and click on the top angled point (zoom in if necessary). Holding the Shift key to constrain the movement to a horizontal path, drag the point laterally until it aligns vertically with the bottom point, as shown in this example. You can move the point using the arrow keys for more precision if you prefer.

5 To tidy it up, select the Delete Anchor Point Tool (found in the Pen Tool flyout menu), and click on the bottom point to delete it (as shown in this example) as it's now become redundant. Voila! You've got a straight edge on a rounded rectangle!

Moving the corner point
Deleting the anchor point
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