husband wife US property rental

[ND]

A USC husband wife with a US property rental can elect on their joint return for it be treated as a JV and not ptshp [http://www.irs.gov/Businesses/Small-Bus ... Businesses].

Sch E instructions state: If you and your spouse each materially participate as the only members of a jointly owned and operated rental real estate business and you file a joint return for the tax year, you can elect to be treated as a qualified joint venture instead of a partnership. This election, in most cases, will not increase the total tax owed on the joint return. By making the election, you will not be required to file Form 1065 for any year the election is in effect and will instead report the income and deductions
directly on your joint return.

Mere joint ownership of property that is not a trade or business does not
qualify for the election.

US Treasury Reg Section 301.7701-1(a)(2) which states " mere co-ownership of property that is maintained, kept in repair, and rented or leased does not constitute a separate entity for federal tax purposes."

[full text: Certain joint undertakings give rise to entities for federal tax purposes. A joint venture or other contractual arrangement may create a separate entity for federal tax purposes if the participants carry on a trade, business, financial operation, or venture and divide the profits therefrom. For example, a separate entity exists for federal tax purposes if co-owners of an apartment building lease space and in addition provide services to the occupants either directly or through an agent. Nevertheless, a joint undertaking merely to share expenses does not create a separate entity for federal tax purposes. For example, if two or more persons jointly construct a ditch merely to drain surface water from their properties, they have not created a separate entity for federal tax purposes. Similarly, mere co-ownership of property that is maintained, kept in repair, and rented or leased does not constitute a separate entity for federal tax purposes. For example, if an individual owner, or tenants in common, of farm property lease it to a farmer for a cash rental or a share of the crops, they do not necessarily create a separate entity for federal tax purposes.]

My question is whether a NRA husband and NRA wife jointly owing and renting out for income a US property rental can report their respective rental income on 1040NR returns (NRA cannot file joint return) or must they file a Form 1065 partnership return?

If they can file 1040NR can and should they make said election for it be treated as a JV and not ptshp, and if so, what are the mechanics of making and reporting such election?