Which one of the following statements is correct about a passive loss carryforward of a prior passive activity that is disposed of during the tax year?

a) The passive loss carryforward of a prior passive activity is deductible in the year of disposition.

b) The passive loss carryforward is lost and may never be deducted.

c) There is no passive activity loss carryforward. It would have been deducted in the last year that

the activity was passive.

d) The passive activity loss carryforward is added to the basis of the property.