Prepare cake mix according to directions on package. Bake in 2 round cake pans. Cool. Slice each layer in half.
Combine sugar, sour cream, and coconut. Mix well and chill. Spread coconut mix on layers, reserving 1 cup. Mix whipped topping with remaining coconut mixture and frost sides and top. Keep cake refrigerated. Better if made 2 or 3 days in advance. Freezes well also.