For example, you bought a personal residence for $90,000 some years ago and it's now worth $550,000. Your basis for a rental home is $90,000 ( lesser of your basis or the fair market value). Land value is ignored in this example.
You might be better off selling the house and buying one for rental at the same price. Using the above numbers, you'd have no tax on the $460,000 gain, assuming you qualify for the $500,000 exclusion. Your basis in the new property would be $550,000. That would produce much higher depreciation deductions, and increase your cash flow.
If you convert your residence to a rental and rent it out for three years and then sell it at a loss, you may claim a long-term capital loss. Of course, if prices increase and you sell it you will have a capital gain. The residency exclusion rules apply to the sale of a residence owned and used as a residence for at least 24 of the 60 month period prior to the sale. That is why you need to rent your home for at least 3 years to avoid the residency rules that prohibit claiming a loss on a principal residence.