There are many ways to digitally fold the corner of the paper. This is
one of them. I will use 3 different paper here. The first layer will be
the background, the second will be the front paper and the third (the
top layer) will be the back of the front paper (the folded corner). 1.
Open 3 papers of your choice and place them on the same file, following
the order described above. Select the TOP layer. Select a square on the
corner using the Rectangular Marquee Tool. If you want a perfect square,
hold Shift
while dragging the mouse. Select INVERSE (Shift+Ctrl+I) and hit Delete.

2. Now you can use the Polygonal Lasso Tool (L) but I will use the
Rectangle Tool (U) and make a path. Deselect (Ctrl-D), choose the
Rectangle Tool and while pressing Shift, draw a larger square (be sure
the Paths is selected on the menu bar:

3. Edit, Transform and Rotate the Path (Ctrl+T) until
the diagonal meet the 2 opposite corners of the Folded Corner.

4. Hit Enter. On the Path Window, hit Load Path as a
selection. Select INVERSE (Shift+Ctrl+I) and hit Delete. Deselect (Ctrl+D).
Still on the Folded Corner Layer, use the Magic Wand Tool (W) to select
the empty upper corner:

5. Select the Front Layer and hit Delete:

6. Deselect (Ctrl+D) and go back to the Folded Corner
Layer. Edit, Transform and slightly warp the smaller sides of the
triangle towards the center like this:

7. Accept the changes when you are done, by hitting
Enter. Create a new layer and draw a black line using a large Brush Tool
(B) – I used size 300 – over the larger side of the triangle. The black
line should be like this:

8. Apply the following Layer Style: Fill Opacity: 0;
Inner Glow: Blend Mode Screen; opacity 50%; Color of Glow – select the
main color of the Folded Corner paper; Source Edge; Choke and Size
maximum; the
other items are default.

9. Filter, Blur, Gaussian Blur (I used 40 here, but you
can adjust as you wish):

10. Back to the Folded Corner Layer, use the Magic Wand
Tool (W) and select all the empty areas (or Ctrl+thumbnail and Inverse
the selection). Select the top layer (the Gaussian Blurred one) and hit
Delete. You should have your folded corner similar to this one:

11. Apply Shadow to the Folded Corner. Link the Folded
Corner layer to the one right above and move them 1 pixel up and 1 pixel
to the left (if you are working on the left corner of the paper). Here
is the final result:
