I'm in VA and I don't know the answer.  (Note to self: I'm so happy I don't have any clients who did this 3-year spread!)

I would think this would still be MD source income since it was MD source when the actual transaction occurred and the IRC just spreads the taxation over three years.  But I haven't seen anything from either side of the Potomac that would clarify this.

@sjrcpa may know to MD tax ramifications.

Rick