Only if your daughter is "in business" for herself, can expenses be claimed for prize money. The income and associated business expenses would be reported on SCH C as a part of her personal tax return. Then in addition to the regular income tax paid on the income, she would also pay the additional 12.6% self-employment tax on any earnings over $400.. More than likely, that would negate any business deductions claimed.
Assuming she received a 1099-MISC with the amount awarded in box 3 and further assuming it's your daughter's SSN on that form, she files her own tax return. Here's how to enter a 1099-MISC that is not earned business income.

Reporting 1099-MISC (box 3 or box 7) that is not self-employment income

Under the Wages & Income tab (or Personal Income tab) scroll down to Other Common Income and elect to start/update Income from form 1099-MISC. Then click YES to indicate you have a 1099-MISC.

Enter the 1099-MISC exactly as printed, and then Continue.

Enter the reason you got this money – be it scholarship, bonus, streaking butt naked across the 50 yard line of the super bowl, whatever. Then continue.

Select None of these apply, then Continue.

Select No, it didn’t involve work….. and Continue.

Select ONLY the tax year for which this specific 1099-MISC was issued. Do not select the year that you received the 1099. Select the year for which the 1099-MISC was issued. Select no other year. Then Continue.

Select No, it didn’t involve an intent to earn money, then Continue.

Select NO, then Continue.

Click the DONE button, and that does it.