Question

She held it out to him (begin with IT)

Answer 1

The correct answer is, “It was held out to him by her.” Or “It was held out by her to him.”

It is the part of active-passive sentences.

We just changed active to passive form with the change in active and passive form.

Also, since she did something hence it was mentioned with a “by her” phrase.  

Answer 2

It was held out to him by her. In this sentence, the voice has been changed from active to passive.

Changing the voice helps to reflect and focus on the other part of a sentence.

It also helps to change the tone of the tense without changing the meaning of the sentence.