I would like to know the difference between the following two sentences
Has he finished reading the book?
Is he finished reading the book?
Appreciate any insight.
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Both of these mean much the same thing. It's really just two ways to ask the same question. The first asks whether a particular action is complete, while the second asks whether a particular condition is true.
A similar example
Have you finished eating?
Are you finished eating?
In much the same way (with slightly different grammar)
Have the children come home from school?
Are the children home from school?