In a medium bowl, whisk together the cake flour, baking powder, salt and nutmeg.
In a large mixing bowl or bowl of a stand mixer, cream together the butter and sugar until it becomes a sand-like consistency, about 1 minute.
Add the egg yolks and beat until well combined, scrape down the sides of the bowl.
Add the dry ingredients in 3 additions, mixing on low, just until combined, alternate with sour cream and scraping down the sides of the bowl in between additions.
The dough should be smooth and slightly sticky. If it’s too sticky, mix in 1 more tablespoon of cake flour.
Cover bowl with plastic wrap and chill in the refrigerator for at least 1 hour or until firm. This could vary depending on the temperature of your room while mixing the dough.
On a floured surface, roll the dough out to ½ inch thick.
Use a donut cutter with a hole in the center, dip it in flour before each cut to prevent sticking and cut out the donuts.
Place the cut dough on a parchment-lined baking sheet and place it in the refrigerator while the oil is heating. The dough should be slightly cold before frying.
To fry the donuts, add 2-3 inches of oil into a heavy-bottomed pan or large Dutch oven heated to 325 degrees F. (this is easiest when using a thermometer attached to the side of the pot)
Fry the donuts a few at time for 2-3 minutes on each side, depending on the size of your pan.
Be sure to keep an eye on the thermometer and adjust the stove temperature if needed.
Remove the donuts from the pan when they are golden brown and place them on wire rack to drain.