Please stop! i can't bear it!
Firstly you don't drop by 500kcal per day. You reduce by 500kcals and stay at that until you plateau again (in theory). So 500kcals per week or so is sensible.
Yes, of course you would have a 500kcal deficit on any one day, but not daily.
If you dropped 500kcals a day, then from a maintenance of 3000kcals you would be at 0kcal by the end of the week!
Secondly it is NOT the case that you WILL drop 1lb of fat by reducing 3500kcals. Yes, it is true that 1lb of fat = 3500kcals, but it is NOT true that weight loss and weight gain is linear. At all.
To answer the OP's question; The amount of calories that is too much to cut on is simply the amount you do not lose weigh at! (as stated above IIRC)
As a good guideline, then around 10-15% below maintenance (or AMR) is a good level to reduce by.
It is vital when counting calories to know what your LBM is - an educated guess being the minimum you require.
I am not saying it is vital to know this to lose or gain weight - just when counting calories.