You can easily and cheaply make your shed a foot taller. Some stores don’t even sell 7ft siding so you might have to buy 8ft siding anyway. Rather than cutting it off go ahead and use all 8 feet and gain the extra height. Just add 12 inches to all vertical cut measurements.
Additional materials and cost
The only additional material you will need is one more piece of siding to cut up and use to cover the gable ends and 2 or 3 pieces of “z” flashing (depending on the width of your shed).
Splice the siding
Splice the siding at the top plate and trim the bottom edges to the proper overhang.Install “z” flashing
Install the “z” flashing to make the joint water tight then cover the gable end with siding.