When we refer to a thing near us, we use これ kore. For example, we write これ は きって です。(Kore wa kitte desu which means Here is a stamp.) when we holding a stamp in front of us.
If there is a cat not far from us, we can say それ は ねこ です。(Sore wa neko desu which means 'That is a cat.').
However, if the cat is up in the tree, then we say あれ は ねこ です. (Are wa neko desu which means 'That is a cat.".
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