diff --git a/examples/cvae/baseline.py b/examples/cvae/baseline.py
index 68695c6d5e..f901631806 100644
--- a/examples/cvae/baseline.py
+++ b/examples/cvae/baseline.py
@@ -34,8 +34,12 @@ def __init__(self, masked_with=-1):
 
     def forward(self, input, target):
         target = target.view(input.shape)
-        loss = F.binary_cross_entropy(input, target, reduction="none")
-        loss[target == self.masked_with] = 0
+        # only calculate loss on target pixels (value = -1)
+        loss = F.binary_cross_entropy(
+            input[target != self.masked_with],
+            target[target != self.masked_with],
+            reduction="none",
+        )
         return loss.sum()
 
 
diff --git a/tests/test_examples.py b/tests/test_examples.py
index d8abf2c450..8e62a7f770 100644
--- a/tests/test_examples.py
+++ b/tests/test_examples.py
@@ -123,10 +123,7 @@
     "vae/ss_vae_M2.py --num-epochs=1 --enum-discrete=sequential",
     "vae/vae.py --num-epochs=1",
     "vae/vae_comparison.py --num-epochs=1",
-    pytest.param(
-        "cvae/main.py --num-quadrant-inputs=1 --num-epochs=1",
-        marks=pytest.mark.skip(reason="https://github.com/pyro-ppl/pyro/issues/3273"),
-    ),
+    "cvae/main.py --num-quadrant-inputs=1 --num-epochs=1",
     "contrib/funsor/hmm.py --num-steps=1 --truncate=10 --model=0 ",
     "contrib/funsor/hmm.py --num-steps=1 --truncate=10 --model=1 ",
     "contrib/funsor/hmm.py --num-steps=1 --truncate=10 --model=2 ",