1) Do I list the land sale on Schedule D for my federal taxes?
yes. Your cost basis in the land will be it's FMV at the time the original owner passed that you inherited it from. So it's perfectly possible, if sold within a reasonable timeframe after the original owner's passing, that you sold it "at" FMV; meaning you no gain or loss, and therefore no tax liability on the sale.
2) Do I have to pay taxes on the profit in the state where the land was?
If that state taxes personal income, then yes. So you may need to file a non-resident return for that state.
3) Do I have to pay taxes on the land sale on my state taxes?
Depends. But most likely yes, if the gain and other figures are high enough.
If not will turbo tax delete that information when doing my state taxes or will I have to manually delete the entry?
When doing state taxes for multiple states, do your resident state tax return last. This is because many states that tax personal income will allow you a credit to your resident state tax liability for taxes you paid to another state. But the program has no way of "knowing" this, unless you complete all non-resident state tax returns before you start your resident state tax return.
