In January of the current year, Josh purchases all the stock of Ballpark Corporation for $100,000. Ballpark's taxable income for the current year is $200,000, and it pays $61,250 in income tax. None of the earnings is distributed as dividends. Josh believes that if he sells his stock two years later for $238,750, he will avoid double taxation.
Write a memo to Josh explaining why he is not avoiding double taxation just because he receives no dividends.