Using a MixMaster (or similar electric mixer), cream together butter and 1 cup sugar. Beat in eggs until well-blended. Stir in sour cream.
Sift together flour, baking powder, and baking soda in a medium-sized bowl. Stir dry ingredients into butter mixture and beat until smooth.
In a separate bowl, combine the remaining ½ cup sugar with cinnamon, nutmeg, and nuts.
Turn about ⅓ of the batter into a well-greased bundt pan and sprinkle ⅓ of nut mixture on top. Repeat with second and third layers, alternating batter and nut mixture. Lightly “swish” a spatula through the batter so as to incorporate the bit mixture and the layers of cake.
Bake at 350°F for 40 - 45 minutes. After removing from oven, let cake cool in pan for 15 minutes; then, remove from pan to cool completely on a wire rack.