Joint venture is an election for the federal for a married filing joint 1040. How the couple reports (1040 or 1065) will be determined by if this is a separate property or community property state and if this is a husband/wife sole proprietor or an LLC. They may have to file a 1065. In which case, the K-1's produced will be entered like any other income document.
If they are able to take the joint venture election, they will file either 2 schedule C or E, with all expenses split equally between the two.
For the issue of the 1099 with the incorrect amounts reported, if they can ask the issuer to correct it, that would be best. If not, there are a couple of ways to handle that.