Are there any tax consequences for depreciating an income property?

Yes. You should see a CPA or a tax attorney, as the significance cannot be determined without more facts.

Not at the time you begin to occupy it. Your tax basis will be lower because of the depreciation and the depreciation recapture won't qualify for the homesale exclusion when you later sell the home. The time the property was rented out won't count as occupancy time for purposes of qualifying for the exclusion.