What happens to passive losses on a rental property that is destroyed in a disaster area when it is unlikely that the property would be replaced?

Passive losses are released upon a total disposition of the property in a fully taxable event (IRC Sec 469(g)). Thus, to release the passive loss carryovers a taxpayer needs to dispose of the land. Otherwise, the passive loss carryover continues to be attached to the property and can only be used to offset other passive income.