I have to confess that I just made the same mistake. It's actually pretty obvious from context, though. Since the verb is "ist", the pronoun that follows must be third person singular, nominative case. The only options, then, are "er", "sie", and "es". "Ihr" could be second person plural, nominative case, but in that case the verb would need to be "seid"; alternatively, "ihr" could be third person singular, accusative or dative, but the verb "ist" always puts the predicate in nominative case. From the context, "er" is the only grammatically correct option.
But, on duo they are often pronounced as "ear" for both er + ihr. Is that just a problem with duolingo or do some native speakers pronounce er and ihr the same way?
In portuguese, the same happen! We have "onde" meaning where and "aonde", a contraction of the preposition and the adverb. Many native speakers mistake this forms here in Brasil.
En Spanish "Dónde" and "A dónde" for questions. Also "donde" and "adonde". In the same way, many natives cannot tell the difference but when one is learning a new language one has to learn it. Many times learning another language can help us to know better ours.