Which of the following statements highlights an advantage of partnerships?

The statement about partnerships permitting pass-through taxation accurately emphasizes a significant advantage of this business structure. In a partnership, the income earned by the entity is not taxed at the partnership level. Instead, the profits and losses "pass through" to individual partners, who then report this income on their personal tax returns. This feature can lead to a single layer of taxation, which contrasts with C-corporations that face double taxation: once at the corporate level and again at the shareholder level when dividends are distributed.

This pass-through taxation can make partnerships more attractive for individuals seeking to minimize their overall tax liability, as they avoid the corporate tax burden. It also simplifies tax reporting, as partners report their proportionate share of income, deductions, and credits, reflecting the partnership's financial performance on their personal returns.

The other statements present characteristics that do not illustrate benefits of partnerships. Unlimited liability, multiple partners for decision-making, and the limitation of contracts to verbal agreements highlight potential drawbacks or mischaracterizations of the partnership structure, rather than advantages.