Business 5 min read By Callum Montgomery
Billionaire’s $40m Ferrari purchase could yield $13m US tax write-off
Dr Herbert Wertheim paid $40m for the first Ferrari Luce at a charity auction. US tax rules could return more than $13m of that sum, highlighting how the Trump administration’s new limits still reward large philanthropic gifts.
An 87-year-old American billionaire who bought the first Ferrari Luce for $40 million at a charity auction may be able to claim more than $13 million of that sum back from the US government under federal tax rules for philanthropic donations.
Dr Herbert A. Wertheim, an optometrist-turned-businessman and philanthropist, purchased the electric vehicle at a Sotheby’s public auction earlier this month. The sale benefited the Ferrari Foundation, which funds global education initiatives. The winning bid was more than 36 times the model’s pre-sale estimate of $1.1 million. The Luce normally retails for $640,000, but the auctioned car carried a higher price because it featured a pre-production chassis.
Automotive content creator Peter Greaves first highlighted the potential tax benefit in a recent YouTube video. When Wertheim files his 2026 taxes, he would subtract the estimated sale value of $1.1 million from the $40 million purchase price. Under Internal Revenue Service rules for 2026, he would then deduct a 0.5% floor of his adjusted gross income, which Greaves estimated at $200 million, leaving $37.9 million. The so-called 2/37ths rule created under the One Big Beautiful Bill Act caps tax savings on itemized deductions at 35% for top earners, down from the previous 37%, further reducing the sum to $35.85 million. According to tax law, 37% of that total could be claimed, meaning Wertheim could receive more than $13 million back from the government.
Wertheim has made no public comments about whether he intends to take advantage of the write-off for the Luce or for any previous charity auction purchases. The philanthropist, who has an estimated net worth of $4.8 billion, previously paid $26 million for a Ferrari Daytona SP3 at a charity auction. He has donated more than $200 million to various causes, including $50 million to UC Berkeley Optometry and $100 million to Baptist Health Foundation. In February, he paid $2 million at a Mar-a-Lago charity event for a private visit with President Donald Trump at the White House. He also briefly launched a Congressional bid in Florida’s 22nd District earlier this year.
The purchase comes as Ferrari navigates controversy around the rollout of its first electric vehicle. Former Ferrari president and chairman Luca di Montezemolo joined analysts and investors in criticising the model’s design, calling it ugly and un-Ferrari-like, at a time when other luxury automakers were scaling back their own EV efforts amid low demand. Ferrari may have the last word, however: the Financial Times reported last month that the company exceeded its short-term sales goal of 500 units for the Luce.
Tax breaks for philanthropy are an American tradition dating back to 1917, when Congress created a federal income tax deduction for charitable gifts under the War Revenue Act. The measure was designed to keep private philanthropy alive during World War I and relieve the US government from funding essential social welfare programmes. Those benefits have expanded over the past century, but the Trump administration has made it harder for wealthy donors to recover money from their gifts. The One Big Beautiful Bill Act effectively cut the benefit from 37% to 35%, and itemised taxpayers must now deduct donations only in excess of 0.5% of their adjusted gross income.
The policy changes may reshape philanthropy. The new 35% limit could reduce donations by between $4.1 billion and $6.1 billion, according to the Indiana University Lilly Family School of Philanthropy. Experts warn that fewer big donors, or big donors giving less, would place a heavier burden on middle-class givers to bridge a gap that is not realistic as financial pressures on less-wealthy households increase.
«The nonprofit sector says that every dollar matters, and so incentivising small donations from every household could have a meaningful impact for certain kinds of organisations,» Elena Patel, co-director of the Urban-Brookings Tax Policy Center, told CNBC last November. «But the truth is that those kinds of contributions, however, just are not the bulk of charitable giving in the charitable sector.»
