This is a no-date (from the 1970's judging from the design) Lincoln memorial cent which is struck on a steel nail. The head of the nail is in front of Lincoln's face, and the imprinted indentions on the nail are visible when viewing the "edge" of the nail. The reverse shows part of the memorial building and some lettering. An amazing coin, and one of just a few known, and before this example we've never seen one for sale. The opportunities to buy a cent on nail are very few and far between, and many advanced collectors have never even seen one much less had a chance to buy one.
The error occurred when a nail somehow made it into the minting press and was struck between the dies, causing the design to be stamped on the thing nail. Coin's struck on foreign objects are extremely rare on U.S. coins and are perhaps the most amazing looking errors.