That does look like it was a distribution from an inherited IRA. But apparently your wife took all the money out of the inherited IRA, whether or not she realized what she was doing. As I said above, once it's taken out of the inherited IRA it's taxable income.
Since it apparently was an inherited IRA, you have to tell TurboTax "I inherited this IRA." That tells TurboTax that you can't roll it over, which is why it doesn't ask if it was rolled over.
I'm not sure that your wife's new annuity account is a valid or legal retirement account or IRA. She couldn't make that big an IRA contribution all in one year. (Though if she meets the requirements to make a deductible IRA contribution, she might be able to deduct at least part of it.) It might be an excess contribution, for which she will pay a 6% penalty every year until the excess is removed. She may be able to avoid the penalty for 2023 if she removes the excess by April 15, 2024, but that presumably will incur an early withdrawal penalty.
The "financial guy" might be a crook, but more likely he is just incompetent. If he is "adamant that the money isn't taxed," ask him why your wife got the 1099-R showing it as taxable. If he says anything about a rollover, remember that you can't do a rollover from an inherited IRA.
Selling an annuity usually pays a big commission.
