September 27, 1995
The *************** Bankruptcy Estate is the owner of a winning "Mass Millions" lottery ticket; the United States Bankruptcy Court for the District of *************** has approved the sale of the future income to be derived from the ticket. 
You request a letter ruling determining whether the gain from the sale of the right to future income attributable to annual payments derived from the winning ticket is taxable to the non‑resident bankruptcy estate as Massachusetts source income when the sale of that right is conducted in Connecticut.
Non‑residents are required to make returns and pay tax on Massachusetts source income. G.L. c. 62C, § 6(a); G.L. c. 62, § 5A. This requirement is extended to the trustee in bankruptcy for the estate of a non‑resident by G.L. c. 62, §§ 10, 13. Massachusetts source income includes "items of gross income derived from or effectively connected with. . . (2) the participation in any lottery or wagering transaction within the commonwealth. . . ." G.L. c. 62, § 5A (emphasis added.) See also 830 CMR 62.5A.1(3)(d) and LR 84‑93. Because the gain from the sale of the right to the future stream of payments is derived from or effectively connected with participation in the Massachusetts lottery, it will be taxable to a non‑resident bankruptcy estate as Massachusetts source income.
Very truly yours,
Commissioner of Revenue
 Disposition of the right to Massachusetts Lottery prizes is governed by G.L. c. 10, § 28:
No right of any person to a prize shall be assignable, except that payment of any prize may be made to the estate of a deceased prize winner, and except that any person pursuant to an appropriate judicial order may be paid the prize to which the winner is entitled, and except that the commission may, by regulations adopted pursuant to section twenty‑four, permit assignment of prizes for purposes of paying estate and inheritance taxes, or to a trust the beneficiary of which are the prize winner, his mother, father, children, grandchildren, brothers, sisters, or spouse. Neither the commission nor the director shall be liable for the payment of a prize pursuant to this section. [Emphasis added.]
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