There're two ways to do that. If you have an
enterprise developer account($199 one), you can create an
enterprise provision to sign your
ipa file and then can send the app to be used by any of your friend. It'll ask for confirmation while running for the first time on the device.
Another method is when you don't have the enterprise account, rather you have a simple developer account($99 one), you'll need to add your UDID of your friend's device to your devices' list and create a developer provision which needs to include that device.Just to warn you, you can only add 100 devices at max and once added you won't be able to remove that device unless you renew your developer account. Now you can use this developer provision to sign your ipa.
In both ways the ipa needs to be installed via
IPCU(iPhone Configuration Utility) and not via iTunes(I am not sure if iTunes will allow installation of these ipa). Just drag and drop the ipa, select the connected device and hit install.
You can add their apple id in your test user's list, which will make their IDs as sanbox ids and then they can purchase anything from your app, without actually paying anything.