1. This bone is the dog's.
2. The dog is in the garden. The bone is its.
3. I have a dog. This bone is its.
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Can we use 'its' as it #2 and #3?
syntactically correct, but no native speaker would say it that way.
We'd say the bone is his or the bone is hers.
We generally associate a sex with animals, especially pets.
But even if not, "its" is generally not used in that way -- as a pronoun.
The book is red. That color is its. -- sorry, just not said.
Not sure why, but "its" is just never used at the end of a sentence like that.
Oddly enough, all of the other possessive pronouns are used like that all the time.