Which statement is true regarding the tax obligations of a partnership?

Partnerships are generally subject to a pass-through taxation structure, where the income, deductions, and credits of the partnership are passed on to the individual partners. This means that the partnership itself does not pay federal income tax; rather, the income earned by the partnership is reported on each partner's personal tax return. Therefore, the partners are responsible for paying taxes on their respective shares of the partnership income at their individual tax rates.

This structure allows for the avoidance of double taxation that corporations face, where the corporate entity pays taxes on its income and then shareholders pay taxes again on dividends. In a partnership, all income is taxed at the partners' individual levels, which aligns with the true nature of ownership and profit-sharing in a partnership.

The other options do not accurately reflect the tax obligations of a partnership. Partnerships are not taxed as separate entities, they do have tax obligations through the individual partners, and taxation is applicable to all partners, not limited to only limited partners.