NGC 985 is a ring galaxy containing a Seyfert nucleus embedded in a bright optical knot which is seen as part of the ring. We present near-IR observations of NGC 985 which show that the knot containing the Seyfert nucleus lies at the center of an extended luminosity distribution with IR colors very different from those of the surrounding ring. The K-band light distribution of the knot is shown to have an r1/4 law profile and has a central surface brightness consistent with that of the bulge of a small early-type galaxy. Previous optical studies have shown a peculiar twisted "arm" structure extending from the Seyfert nucleus. However, after removing the bulge light from the IR images, we have found that (a) the "arm" is actually a linear structure which originates at a possible second nucleus that is 3' 3 from the Seyfert core and (b) the ring classification of NGC 985 is probably incorrect since the ring is incomplete and the overall morphology is more consistent with a tightly wrapped one-armed spiral. Wisps of low-surface-brightness emission are also seen to the southeast of the galaxy. Such material, when taken together with the evidence for a second nucleus, strongly suggests NGC 985 is composed of two colliding galaxies.