The does not apply to a business in this case, because it's not compensation. If the old computer was used to pay for the services rendered to the client, then the FMV of the computer would be taxable income to the business, and not a deduction. If it was given to the business owner, then there's nothing reportable by the business owner as either income or expense for the computer that business received from the client at not cost, and for nothing in exchange. Therefore if the business sells the computer, the cost basis of the computer is zero and all money received on the sale of the computer is taxable income to the business.
