If the home was not used for business purposes (i.e.; rented out) during the time the HOA fees accumulated, they are not deductible at all, and are not reported anywhere on the tax return.
As for capital gains, if the estate sold the property, then the sale would qualify for the "lived in 2 of last five years it was owned by the resident" capital gains tax exclusion.
If the property was transferred to the named beneficiary, then the named beneficiary gets a step-up in basis. The only taxable gain would be any profit made over that stepped up basis (taking into account deductible selling expenses, of course.) Typically, if the property is sold within a reasonable time after the passing of the original owner, there is very little (if any) gain to be taxed anyway.
