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Today in class we were going over the past tense. The textbook had a question: "Who was your best friend in high school?" My student answered, "It was John Smith." Without thinking too much, I corrected him and said, "He was John Smith." Now that I think about it, "He was John Smith" also sounds very strange. Maybe "who?" questions don't go well with short answers or the short answer should have been: "John Smith was." What are your thoughts?
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All 3 sound fine to me.

('It' can certainly refer to a person in some circumstances: 'Hi! It's me! How are you?')
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Anonymous"I have a child"
What's their name? - Commonly said. This usage is sometimes called "singular their" or "generic their".
What's its name? (not it's, by the way) - Also OK when you don't know the gender.
What's his name? - You can use 'his' here as a generic, and expect to be corrected if it's actually her.

CJ
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I've been reading about this myself. It's similar to the lack of substitute for the "his/her" attribution
"I have a child"
"What is their name?" doesn't sound right, it would be "What are their names?"
"What is it's name?" is a common substitute, but again, I feel like "it" isn't a very formal way of referring to a person.
"What is your child's name" is grammatically correct, but it's not an actual substitute for "his/her". You couldn't say, "Oh you have a sibling? What is your child's name" You could switch it to "your sibling's name", but reconstructing isn't the same as substituting.

I hate my brain sometimes...
 CalifJim's reply was promoted to an answer.
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This is an interesting question, because I've never thought about something like this before. Yes, "it" can definitely be used for a person, which seems rather surprising at first - if you had asked me before I saw your post, I probably would have said "no," of course not.

The following are correct:

Teacher: "I want to know who put the frog in my desk. If I don't get an answer, you all stay after school and do homework." Student: "It was Jane."

Dad: "Who put the dent in the new car. If I don't get an answer, no one drives it." Son: "It was me."

Neighbor: "Did you hear? Your neighbor across the street was arrested as the Centerville bank bandit." Other neighbor: "No, it couldn't be him. He's the nicest, most respectable person I've ever known."

Knock at the door. "Who's there?" "It's Jim, open up."