Thanks for the reply!
I think you have misinterpreted what I was originally asking.
I can easily create an alpha from an image by just selecting the portion of the image through a ‘selection’ then simply going into the channel panel and clicking on the mask option.
What I was having trouble with was when I then tried to import/insert that image (with alpha) in another PS project it imported/inserted as a Smart Object. When it came in as a Smart Object there wasn’t an alpha and thus no transparency like the original file. So my question was how do you import/insert a file into an existing project without it becoming a Smart Object?