Danny Trejo Settles $400,000 Tax Debt After Selling L.A. Mansion in Bankruptcy.
Danny Trejo, 80, has made significant strides in paying off his tax debt after selling one of his homes amid an ongoing bankruptcy. The actor, who filed for Chapter 11 in February 2023, was able to settle a substantial portion of his tax obligations by selling his second home in Arleta, California.
In his Chapter 11 filing, Danny listed his assets at $2.2 million and liabilities totaling $3.6 million. The majority of this debt stemmed from back taxes, with the actor attributing it to mistakenly claimed deductions over the years. His primary asset was a $1.2 million home, with a second one valued at $750,000. Danny disclosed that, with the proceeds from the sale of his three-bedroom, two-bathroom Arleta property, he was able to pay off $400,000 in tax debt. The property was sold in April 2023 for $828,000. From this sale, Danny paid $307,000 to the IRS and $93,000 to the State of California Franchise Tax Board.
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Danny’s legal team shared that he has been timely in his tax repayments, paying an additional $101,668 to the IRS and $12,844 to the Franchise Tax Board under his repayment plan. "In sum, Mr. Trejo has paid $634,155 in pre-Petition tax obligations in accordance with the Plan," his lawyer stated. The actor’s accountant also filed the 2023 bankruptcy estate tax return, which was paid in full. Additionally, Danny has filed and paid his non-estate personal income taxes for 2023.
As per his bankruptcy plan, Danny agreed to quarterly installment payments from October 2023 to January 2028. Each installment is estimated to be around $101,000, with Danny owing over $1.1 million to the IRS and $142,000 to the Franchise Tax Board.
In his October 2024 filing, Danny confirmed he had also paid $15,000 owed to LA County for property taxes, has kept up with his mortgage payments, and settled a $303,000 debt to Barclays through the home sale. He also confirmed that he was up to date on payments to Toyota Motor. His lawyer stated that Danny expects to file for a discharge in the coming months.
Danny’s extensive car collection, which includes a 1942 Chevrolet Master Deluxe, a 1976 Cadillac Seville, and several other classic cars, as well as a Harley Davidson motorcycle, remains part of his personal assets.
Notably, his taco and donut shops are not included in his personal bankruptcy. The entertainment strikes that affected Danny’s income in 2023 also caused some challenges. In July 2023, his lawyer noted, “Mr. Trejo’s acting career has over three decades and he continues to be in popular demand for films and other productions and the Debtor contends that therefore is a reasonable likelihood that he will make all payments under the Plan.” However, the ongoing strikes impacted his income. Thankfully, the strikes ended months later, and Danny has been able to continue making his payments without issues. The case remains ongoing.
