The most important thing to remember about the grammatical person is that people are not "persons." Rather the grammatical person indicates a relationship between two specific people (or things):

1. the SPEAKER / WRITER of the sentence
2. the SUBJECT of the action expressed by the verb in the sentence.

Three different relationships are distinguished:

• 1st person — subject is the speaker (or writer)
  "I am holding a book."
• 2nd person — subject is spoken to by the speaker
  "You are holding a book."
• 3rd person — subject is spoken about by the speaker.
  "He is holding a book."

You can distinguish among first, second and third persons by noting their distance from the speaker (or writer). If the speaker is the doer of the action of the verb, then that is the closest relationship possible between the speaker of the sentence and the subject of the sentence. There is but one person involved. If the one spoken to (the hearer or the reader) is the doer of the action of the sentence, then there are two players involved — the speaker (writer) of the sentence and the doer of the action (the hearer or the reader), thus a second person is involved. If the doer of the action of the sentence is neither the speaker (or writer) nor the hearer (or reader), then a third person is involved in the relationship between speaker (or writer) and the subject of the sentence.

If the subject is expressed in a sentence (as a noun or noun-like thing), the verb will be third-person.