How many inches does fire drywall need to be from wall out on ceiling?
Drywall (or sheetrock) on the ceiling is installed tight against the wall framing with hopefully less than 1/2" gap. Any gap larger than this removes the support you'll provide later.
The drywall installed on the walls is next installed on the top half of the wall pressed against the ceiling drywall which gives it support. Then the bottom half of the drywall on the walls is install tight against the board above with joints offset. Any gap at the floor is covered with trim.
Fire rated drywall, if the ceiling is required to have this installed, must be installed for the entire ceiling of the given room. This helps provide a means of slowing a fire from reaching the room above it. Make sure you understand, by no means will this stop a fire from advancing it will only slow its progress in order to give occupants more time to exit the building.