Which of the following tax carryforwards affects the basis of an asset upon transfer in a divorce?

The correct choice concerning tax carryforwards that affect the basis of an asset upon transfer in a divorce is passive activity loss. This type of loss arises when a taxpayer's investment in a business or rental property generates losses that exceed the income produced by those activities.

In the context of divorce settlements, when assets are transferred between spouses, the tax attributes associated with those assets can impact the adjusted basis. Passive activity losses are important because they have specific rules regarding how they can be utilized and may carry over to future tax years. When an asset that has passive losses is transferred, the receiving spouse can potentially use those losses against their passive income, thus influencing the overall tax implications and adjusted basis of the asset acquired.

For other carryforwards listed, while they might affect an overall tax strategy, they do not directly adjust the basis of assets transferred in a divorce. Capital gains loss, ordinary income loss, and net operating losses typically relate to tax liabilities for the individual but do not have the same relevance in altering the basis of assets during a divorce asset division.