If you have a profit motive, then showing your custom bike would count as a business.
There is a catch here. The IRS expects to see a profit. If you lose money more than two out of five years, the IRS may question your profit motive and claim this is really a hobby.
Hobby expenses are deductible only to the extent of your hobby income. You can have a loss if it's a business, but not if it's a hobby.
This article explains more about how the IRS views the difference between a business and a hobby.
I started with a new brand of motorcycle that I intend on selling, this show was part of market research to see if people in my area are interested in this type of small displacement motorcycle.
Ordinarily, this would count as organizational expenses for starting a business. You would deduct them after you have started the business - you can subtract up to $5,000 in organizational expenses and $5,000 in starting expenses, but only after you have started the business. The rest of your organizational expenses gets amortized over 15 years.
However, since you are competing for prize money, you could consider that you have already started this business. After all, pro golfers also compete for prize money, and that is their business. If you elect to close the business because your market research indicates that it won't work, then at least you will have gotten credit for your hard work and expenses.
If you have a profit motive, then showing your custom bike would count as a business.
There is a catch here. The IRS expects to see a profit. If you lose money more than two out of five years, the IRS may question your profit motive and claim this is really a hobby.
Hobby expenses are deductible only to the extent of your hobby income. You can have a loss if it's a business, but not if it's a hobby.
This article explains more about how the IRS views the difference between a business and a hobby.