It's ambiguous, we have to guess from the context. In this case, it could mean either lose or drop, but the first seems more likely.
Barnet har tappat en tand is normally 'The child has lost a tooth', not 'dropped', though it could possibly mean that too in the right context.
Jag tappade glaset och det gick sönder 'I dropped the glass and it broke', – lost is unlikely to be the right translation.
If you want to say 'lose' unambiguously, there's a particle verb: tappar bort. (stress on bort).
"Förlora" means losing in the sense of for example losing a football match or a contest. It can also mean losing something in the sense of not having something anymore, like "tappa", but to me it feels more permanent, like you lost your job or you lost a family member to a fire. You can also only "tappa" an object, if you briefly lose a person you use "tappa bort" like Arnauti has already explained.
This is a computer-generated hint. Both the translations your passport and the passport are accepted in English, but you can't just say passport. Duo is trying to be helpful and generates those hints, but sometimes it doesn't work out so well. We can't change it, unfortunately. – It's more natural to say passet in Swedish and your passport in English, but ditt pass in Swedish and the passport in English work too.
It is a mess, but its OUR mess. I love my language. All languages have their difficult parts for foreign speakers. Personally, we natives have so any different ways of twisting English based on location that I think that must be the worst part for a learner to understand anyone.