Yes, you will have to pay income taxes on this. This is Income in Respect of a Decedent - you are required to pay the income taxes because it is compensation from working. This represents the income paid after your father's death. To look at it another way, if your father would have received the money, he would have to pay the income taxes then he would have gifted it to you (the amount would be less because the IRS taxed him).
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
