Ihr Lippenstift ist rot und passt gut zur Bluse.

It can be either one, depending on context:

• ihr Lippenstift = her lipstick
• Ihr Lippenstift = your lipstick in the formal sense

In this sentence, Ihr is at the beginning, so it is capitalized anyway. That means you cannot tell from capitalization alone whether it is formal your or simply sentence-initial her.

You need the surrounding context to know which meaning is intended.

Because all German nouns are capitalized.

So:

• der Lippenstift = lipstick
• die Bluse = blouse

This is one of the most noticeable differences from English.

Because Lippenstift is masculine singular: der Lippenstift.

The possessive word ihr- changes its ending depending on the noun it comes before. In the nominative masculine singular, it has no ending:

• ihr Lippenstift = her lipstick
• ihr Rock = her skirt

Compare:

• ihre Bluse = her blouse, because Bluse is feminine
• ihr Kleid = her dress, because Kleid is neuter

So ihr Lippenstift is the correct form.

Because rot comes after the verb ist and functions as a predicate adjective.

In German, adjectives used this way do not take endings:

• Der Lippenstift ist rot.
• Die Bluse ist schön.
• Das Kleid ist neu.

But when an adjective comes before a noun, it usually takes an ending:

• ein roter Lippenstift
• die schöne Bluse

So:

• ist rot = correct
• ist rote = incorrect

In a normal German main clause, the finite verb usually comes in position 2.

Here the structure is:

• Ihr Lippenstift = subject
• ist = finite verb
• rot = complement

So the sentence follows the standard German main-clause pattern.

Because German can omit the repeated subject in a coordinated clause when it is clearly the same as before.

Full version:

• Ihr Lippenstift ist rot und ihr Lippenstift passt gut zur Bluse.

But that sounds repetitive. So German normally says:

• Ihr Lippenstift ist rot und passt gut zur Bluse.

English does something similar sometimes, but German uses this structure very naturally with und.

Here passen means to suit, to go with, or to match well.

So:

• Der Lippenstift passt zur Bluse. = The lipstick goes with the blouse.

This is different from another common meaning of passen, which can mean to fit:

• Das Hemd passt mir. = The shirt fits me.

So the exact meaning depends on context.

Gut is an adverb here, meaning well.

It modifies passt:

• passt gut = goes well / matches well

So:

• passt zur Bluse = goes with the blouse
• passt gut zur Bluse = goes well with the blouse

It adds the idea that the match is a good one.

Zur is a contraction of:

• zu der → zur

So:

• zur Bluse = to/with the blouse, depending on the English translation that sounds most natural

This contraction is very common in German.

Similar contractions include:

• am = an dem
• im = in dem
• vom = von dem
• zum = zu dem

Because the preposition zu requires the dative case.

The noun itself is still die Bluse in the dictionary, but after zu, feminine nouns take dative article der:

• die Bluse → zu der Bluse → zur Bluse

So the change is caused by the preposition zu.

Yes, literally zu often means to, but German prepositions do not always match English word-for-word.

With passen, German uses zu:

• etwas passt zu etwas

English usually says:

• something goes with something
• something matches something
• something suits something

So although zu often means to, in this expression the natural English translation is with or goes with.

Because its subject is Ihr Lippenstift, which is singular.

The verb passen is conjugated here as:

• ich passe
• du passt
• er/sie/es passt

Since Lippenstift is a singular noun, the sentence needs passt.

Yes, that is grammatically correct.

It means:

• Her lipstick is red, and it goes well with the blouse.

Adding er makes the second clause more explicit. But in this sentence, German normally prefers the shorter version without repeating the subject:

• Ihr Lippenstift ist rot und passt gut zur Bluse.

Both are correct.

Yes. The word is:

• der Lippenstift

So you would say things like:

• der Lippenstift ist rot
• ein neuer Lippenstift
• ihr Lippenstift

Learning the noun together with its article is very helpful in German.

It has two coordinated parts joined by und:

1. Ihr Lippenstift ist rot.
2. (Ihr Lippenstift) passt gut zur Bluse.

The repeated subject in the second part is omitted because it is the same subject.

So the overall pattern is:

• Subject + verb + complement + und + verb + adverb + prepositional phrase

That makes the sentence compact and very natural German.