I will look into this again.  I suspect that the answer is that there is no "sale or exchange" to trigger the income aspect.  Donations to a charity might not be a "sale or exchange" and therefore no gain is recognized/realized.  I was hoping to find authority on point, like §351, for instance.   It seems that it is something we all know, but can't remember the authority for the position, but I am satisfied the answer is that no gain is recognized/realized. 

Note what Master Tax Guide says on ¶1062A, page 426, "A capital contribution of capital gain property is generally limited to the fair market value of the property on the date of contribution, reduced my the potential long-term gain if: ..the property is contributed to certain private nonoperating foundations other than qualified appreciated stock (publicly traded stock that would produce long-term capital gain if sold);"

..without a citation

Again, it is the deduction side that is easy, its the income side that I am concerned about, but it seems there is no doubt that income is not imputed.  ....sorry, I am easily amused and don't get out much.  I will work on this weekend and will report.