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¿Dónde vive? - Where do you live? (formal)

¿Dónde vives? - Where do you live? (familiar)

Formal is used when speaking to someone who is older and deserves respect or to someone you don't know.

Familiar is used when you are speaking to someone you know or to children.

tú - you (familiar)

usted - you (formal)

When 'ir" verbs such as "vivir - to live" are conjugated in the "familiar" form, you drop the "ir" and add "es" to make the verb form "vives - you live".

When 'ir" verbs such as "vivir - to live" are conjugated in the "formal" form, you drop the "ir" and add "e" to make the verb form "vive - you live".