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Section 465 (d) carryover refers to the at-risk rules of Section 465 of the Internal Revenue Code.  Your losses are limited to the amount you have "at risk" in the activity.  A loss that was disallowed because of the at-risk rules is generally treated as a deduction from the same activity in the following tax year (a carryover).

You may have indicated that you were not completely 'at risk' in 2020 which may have caused this issue. Make sure you answer the 'at risk' question correctly based on your situation.  Check this out first before going further and review the images.

1. Open your TurboTax Return > Search (upper right) for rentals the Click the Jump to... Link.
2. Edit beside your rental property > Update beside General Property Information
3. Continue to the screen 'Do Any of These Situations Apply to This Property?'
4. Select the checkbox next to 'I have at-risk losses carried over from 2020.'
5. See the image below for assistance.

The amount you see for Section 465(d) carryover is the amount of loss you weren't able to take last year, but may be able to take this year.

If you are certain you didn't have a Section 465 (d) carryover from prior years, you can clear this up by adding a negative 'Miscellaneous' expense  and describe it as  'Section 465 (d) carryover offset' under the rental expense, Miscellaneous expense.

For more information see IRS IRS Publication. 925 - Passive Activity and At-Risk Rules.

At risk is a test that the IRS uses to see if you can deduct losses from certain investments and business interests that you own.

Basic Rule:  You can't deduct a loss from your investment or business interest if the loss doesn't actually cause you to lose money.  Money you've invested in your business that is not at risk can include: 

• Nonrecourse loans; that is, financing for which you're not personally liable.
• Cash, property, or borrowed amounts protected against loss by a guarantee, a stop-loss agreement, or a similar agreement. 
• Money borrowed from a person who has an interest in the business, other than as a creditor.