Step 1

Preheat the oven to 350°F. Line 3 lightly greased 9-inch round cake pans with parchment paper; lightly grease parchment paper. Sift together first 3 ingredients. Set aside.

Step 2

Beat sugar and oil at medium speed with an electric mixer until smooth.

Step 3

Add eggs, 1 at a time, beating until blended after each addition. Add flour mixture, beating at low speed just until blended and stopping to scrape down sides. Fold in carrots and 1 cup walnuts or pecans. Spoon batter evenly into prepared pans.

Step 4

Bake for 30 to 35 minutes or until wooden pick inserted in center comes out clean. Cool in pans on wire racks 10 minutes; remove from pans, and cool completely on wire racks.

Step 5

Beat cream cheese and butter at medium speed with an electric mixer until fluffy; gradually add powdered sugar, beating well. Stir in vanilla.

Step 6

Spread Cream Cheese Frosting between layers and on top and sides of cake.

Step 7

Arrange remaining 1/2 cup of nuts around outer edge on top of cake.

Step 8

Cut with a serrated knife. Store covered at room temperature for up to 2 days or in an airtight container in the refrigerator for longer.