No, there isn't a maximum amount. If it was a rental entire time, you can deduct the entire loss.
However, was it originally your personal property? If it was originally your personal property, was the Fair Market Value when you converted it to a rental MORE or LESS than the Cost Basis at that time?
However, some people misunderstand what "loss" means for a rental property. "Loss" is after depreciation is taken into account. It is best explained by an example:
Let's say you purchased the property for $100,000 and made no improvements to it. Let's say you were able to claim $20,000 in depreciation, and then sold it for $85,000.
In that example, you have a GAIN of $5000, because the selling price ($85,000) is higher than your Adjusted Basis of $80,000 ($100,000 purchase price minus $20,000 depreciation).
Again, if it was originally a personal property and you converted it to a rental when the Fair Market Value was LESS than the Basis at that time, things get more complicated, so please post back if that is the case.
