Answer
Whichever way one looks at the verse, the straight answer to the question is that the true God and eternal life in this particular verse is the Son of God, Jesus Christ.
Part I - Hermeneutics
A common sensical reading of the verse, applying the proper hermeneutical and exegetical principles, in the proper context, will point to the above one and sure conclusion; as also other similar sentence structures in the New Testament, especially in Johannine writings.
I have tried to scrutinize a considerable number of verses where the Greek word “houtos” is used in the Nominative Masculine Singular (NMS) case in the New Testament (excepting only Mark and Luke), in order to find out a decisive way to settle this matter. (There are around 189 occurrences including Mark and Luke).
This is what I observed:
Finding #1:- Unlike the relative pronoun “hos” and its variants that take the prior noun as the antecedent, “houtos” is a demonstrative pronoun that takes the real subject of the sentence (not the object) as its antecedent in the majority of the cases.
Finding #2:- In very rare cases, “houtos” takes the prior noun as the antecedent.
First, let us take the rare cases, where “houtos” takes the preceding noun as its antecedent.
“But He [real subject] spoke of “Judas Iscariot” [object], Simon's
son [object qualified and stressed], for this (houtos) one was
about to betray Him, being one of the Twelve” (John 6:71).
In the above, though the real subject is “He”, that is, Jesus, the object is Judas Iscariot qualified and stressed as “Simon’s son” and “houtos” takes Judas/son as the antecedent.
Another example:
“And now [imperative sentence; hence “You” as the real subject is
implied] send men to Joppa and call for “Simon” who is surnamed
Peter [object qualified and stressed]. This (houtos) one is lodged with one Simon, a tanner” (Acts 10:5-6).
Here again, the object “Simon” is qualified and stressed with “Peter” which is immediately before “this”. So “houtos” takes Simon/Peter as its antecedent.
My point is that when looked at this way, 1 John 5:20 will show that Jesus is the true God:
1 John 5:20:
“And we know that “the Son of God” [the real subject] has come, and He
has given to us an understanding that we may know the “true One” and
we are in the “true One”, in His Son, Jesus Christ. This
(houtos) is the true God and the life everlasting”.
In the above, the Son of God is the real subject of the sentence. But the last object “His Son” is qualified and stressed with “Jesus Christ” and is just prior to “This”. So “houtos” is the Son, Jesus who is the true God and the life everlasting.
Finding #2:- In almost the cases, the real subject of the sentence is the antecedent of “houtos”.
But in the majority cases, the real subject is the real antecedent of the demonstrative pronoun “houtos”. Common sense, context and the sentence structure all make it so. Let us see a few examples:
“But if anyone [real subject] has not “the Spirit of Christ”,
this (houtos) one is not His” (Rom 8:9).
In the above, the real subject of the sentence is “anyone” and it is the real antecedent of “houtos”. Though “the Spirit of Christ” is more important than “anyone”, it is not the subject and hence not the antecedent.
“consider the Apostle and Chief Priest of our profession, Christ
Jesus [real subject], being faithful to “Him” who appointed Him, as
also Moses was in all His house. For this (houtos) One has been
counted worthy of more glory than Moses” (Heb 3:3).
Again, in the above sentence Christ Jesus is the real subject and God the Father is the object. Hence “houtos” is Jesus.
“Everyone [real subject] hearing the “word of the kingdom”, and
not understanding—the evil one comes, and snatches that which has been
sown in his heart; this (houtos) is that sown by the way” (Matt
13:19).
Everyone is the real subject and hence the real antecedent of “houtos”.
Now let us see two more examples from John himself, before looking at 1 John 5:20:
“But the one [real subject] seeking the glory of “the One” who
sent Him, this (houtos) One is true, and unrighteousness is not in
Him” (John 7:18).
Here, Jesus is saying that “the one”, that is, Jesus is the real subject and hence is the true one though He was sent by God. Here, God the Father is the object and hence is not the antecedent of “houtos”.
“because many deceivers [real subject] entered into the world, who
are not confessing “Jesus Christ” [object] coming in flesh; this
(houtos) one is he who is leading astray, and the antichrist” 2 John
1:7).
As is clear, it is the deceivers who are antichrist leading astray, not Jesus Christ.
Now let us look at 1 John 5:20:
1 John 5:20:
“And we know that the Son of God [real subject] has come, and He
has given to us an understanding that we may know the “true One”, and
we are in the “true One”, in “His Son Jesus Christ”. This (houtos)
is the true God and the life everlasting”.
It is crystal clear that in the above, the antecedent of “houtos” is the real subject, the Son of God; not the object, the true One.
So, whichever way we approach this verse, whether through the real subject in most cases or through the immediately preceding noun in very rare cases, “Son of God, Jesus Christ” is the real antecedent and hence “true God and Life everlasting”. This is “to the glory of God the Father” (Phil 2:11).
We have one more verse as an example to show that the same person acts as the “real subject” as well as the immediately preceding antecedent:
“There came a man [the real subject] —having been sent from
God—whose name is “John”, this (houtos) one came for testimony”
(John 1:6-7).
(Man is the real subject and John is the immediately preceding noun to “houtos” and the meaning is inescapable).
Part II - Repetition of Articles
In English grammar, there is a rule regarding the use of articles (a, an, the) as follows: When two nouns or adjectives are joined by “and” preceded by one article, they point to the “same” person or thing. If there are two articles, they point to two persons or things.
For example, “a black and white picture” is one picture that is both black and white. But “a black and a white picture” is in fact two pictures; one black and one white. Similarly, “the Chairman and CEO” is the same person who holds both roles together. But “the Chairman and the CEO” are two persons; one a Chairman and the other a CEO.
In Greek also there is such a rule known famously as the TSKS or Granville Sharp rule. The TSKS is the short for The + Substantive (i.e., noun) + Kai + Substantive (i.e., noun). The TSKS structure, since there is only one definite article in the structure, denotes that both nouns point to the same person.
Some examples:
Gal 1:4 - “the God and Father of us”. Here God and Father are the same Person.
Rom 15:6 & 1 Pet 1:3 – “the God and Father of the Lord”. Here also God and Father are the same Person.
2 Pet 1:11 & 2 Pet 2:20 & 2 Pet 3:18 – “of the Lord of us and Savior, Jesus Christ”. Same Person.
Similarly, in 1 John 5:20, we see the same rule applied to the same Person, proving clearly that “the Life everlasting” and “true God” are the same Person:
“the true God and Life everlasting”.
Now let us see who this everlasting Life is, according to the Scripture:
“And the Life was revealed, and we have seen, and we bear witness, and
we announce to you the everlasting Life which was with the Father,
and was revealed to us.” (1 John 1:2).
Yes, “the Word of Life” (1 John 1:1) was “in the beginning with God and was God” (John 1:1).
Conclusion
It is inescapable: the true God and Life everlasting in 1 John 5:20 is Jesus Christ.