A code W indicates that the purchase was a QLAC purchased with funds from a retirement account, not an annuity paid for out of pocket. Perhaps your friend made a contribution to an IRA and than separately purchased a QLAC with the IRA funds which might seem like paying for the contract out of pocket, but would actually be two separate transactions, both of which would need to be reported on the tax return.
Regarding my earlier reply about taxation of a code W Form 1099-R, as long as a zero is entered in box 2a of the code W Form 1099-R, TurboTax will properly treat it as reportable nontaxable income. Do not leave box 2a blank on a code W Form 1099-R, otherwise TurboTax will inappropriately treat it as taxable.
