When a person dies, taxes are due for any taxable income received during the period of time from the end of the last tax year (generally January 1 to December 31) to the date of death; tax authorities call this the Terminal Year.
Further, tax authorities, such as the Canada Revenue Agency, in order to corral any taxes avoided in previous years by the deceased, imposes the inclusion of certain other amounts as taxable income but only this Terminal Year.
These inclusions can be substantial and often use legal fictions to achieve the tax man's purpose such as 'deeming a dispoistion', which assumes in law that the deceased sold specified property (such as a house) just before the moment of death. This legal fiction creates a window or, as the cynical call it, a black hole of taxation at which, as the asset passes, CRA collects taxes.
As tax laws are subject to significant change in virtually every federal budget, a chartered accountant or a tax lawyer ought to be consulted to ascertain what these inclusions might be in regards to a particular estate.