the rules state on page 7 (Death of a Taoist):
A Taoist that has no more Qi is dead. All his possessions are lost (his Tao tokens, his Buddha figurines, his Yin-Yang). His figurine is placed lying, dead, on the Cemetery tile.
His board becomes possessed (see neutral board below) and the ghosts occupying it continue to act, despite the Taoist’s death. The other players will have to suffer the effects and consequences of the ghosts on this board.
Possessed and neutral boards still have a Yin Phase (as written on page 9 in the rules):
Yin phase for a neutral board
A neutral board’s turn is reduced to a shorter Yin phase (no step 3). There is no Yang phase, because the Taoist is dead or the player is absent. At the end of the neutral board’s Yin phase, the next player (the one after the neutral board) goes.
I hope this helps,