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Actually, this is an issue with English, as the language "technically" lacks a second person plural pronoun, even though different regions will use some form of one.
Because of this, things get lost in translation as the languages' contributors refuse to clarify other than the usual ordered list.
Since I'm an American Southerner, I use "y'all" pretty exclusively. It's a contraction of "You" and "all". I feel that "You all" is already pretty neutral, and that they should have used that in place of just "You."
Anyways, just remember that "Ihr" is the equivalent of "You all", "Y'all", "You guys", " You lot", "Youse", etc.
Indeed, the polite form "Sie" is written always with a capital S. Same for its declinated forms like "Ihnen". But standing at the beginning of a sentence a word has to be written with a capital inital letter. So a "Sie" or "Ihnen" at the beginning of the sentence can have different meanings and the context is important.
"Haben Sie keine Zeit?" => "Don't you have time?" (formal you)
"Haben sie keine Zeit?" => "Don't they have time?"
"Sie haben keine Zeit." => "You have no time." (formal you)
"Sie haben keine Zeit." => "They have no time."
In this context only the meaning of "the boys" is right.
"der Junge" means "the boy" in english. And the plural form of it is "die Jungen". But it is also used to say "die Jungs", which sounds more colloquial. So the given sentence would be right as well to say "Ihr seid Jungs"
For young animals we use in German a similar word but with another gender:
"das Junge" - "the cub" (it is neutral in German, not male!)
"die Jungen - "the cubs" (never use "die Jungs" for that meaning!)
The second meaning that was given by Duolingo, "young", is the german adjective "jung". And it can become by declining the form "jungen":
"die jungen Tiere" = "the young animals".
"den jungen Hund" = "the young dog" (accusative form!)
In this way adjectives are usually written with a small initial letter.
But there is a case when the adjective can get an initial letter:
"I would like to buy that dog." - "The young one or the old one?"
"Ich würde gern diesen Hund dort kaufen?" - "Den Jungen oder den Alten?"
We call that phenomenon "Substantivierung" and a lot of german people have problems with it ;-)