Preheat oven to 350°F. Grease three 8-inch cake pans, line with parchment paper rounds
Make the cake: Whisk the cake flour, baking powder, baking soda, and salt together. Set aside.
Using a stand mixer fitted with a whisk attachment, beat the butter and sugar together on medium speed until smooth and creamy, about 2 minutes. Scrape down the sides and up the bottom of the bowl with a rubber spatula as needed.
Beat in the eggs until combined, then add the sour cream, vanilla extract, and coconut extract. Beat until combined and be sure to scrape the sides of the bowl. With the mixer on low speed, slowly add the dry ingredients and coconut milk.
Beat on low speed until combined, then add 1 cup of toasted shredded coconut. Fold it in by hand to make sure there are no butter lumps at the bottom of the bowl.
Pour batter evenly into cake pans. Bake for 23 minutes or until the cakes are baked through. To test for doneness, insert a toothpick into the center of the cake. If it comes out clean, it’s done.
Allow cakes to cool in the pans for atleast 1 hour, then remove from the pans and place the cakes directly on the rack to continue cooling. The cakes must be completely cool before frosting.