SInce rental income is passive, it's reported on SCH E no matter what. For what form to use, it doesn't matter if the owner qualifies as an RE Pro or not. The SCH E is still the correct form to use. So assuming you two are the only owners, and that you are filing a joint return, just work it through the Rental & Royalty Income (SCH E) section of the program.
As for the 1099-MISC, if it's not gross, then what does the amount shown in box 1 reflect? If it's the amount of cash you actually received after the PM withheld their cut, then you just don't claim the mangement fees, is all.