I can only speak to residential first mortgage underwriting. Because of the typical fluctuation that you mention, capital gains income reported on Schedule D is generally treated as non-recurring and ignored in the qualifying process unless an extended history can be documented (from which the likelihood of consistent future returns can be concluded). Generally, the strictest standard for a manually underwritten loan - one not subject to approval and documentation requirements of one of the various automated underwriting engines prevalent today - holds that the seasoning requirement is satisfied with the three most recent years 1040's evidencing a stable/increasing trend plus verification of the underlying assets. A simple 36 month average will be used as qualifying income unless compelling documentation justifies weighting the average more heavily toward the present. If any of the underlying assets need to be liquidated to consummate the transaction, the calculated average will be reduced by an amount equal to the estimated income-generating power of the liquidated portion of the assets. Income considered unstable or decreasing will be considered a compensating factor only.
Automated engines take the common-sense human evaluation out of the process and approve loans based on comparions of the borrower's overall credit profile to statistical models, relying far more heavily on historical credit management (as summarized in a FICO score) plus comparison of the loan parameters to performance models, and typically ask for far less documentation. Depending on the perceived risk, qualifying income may be averaged from two or just one year's 1040's plus verification of the underlying assets. Occasionally, for highly qualified borrowers in low-risk transactions, simple verification of the assets sufficient to generate the declared capital gains income is sufficient.
For borrowers whose qualification relies mainly on non-wage types of income, the last few years have seen an explosion in popularity of low-doc and no-doc loan programs that require only stated income/verified assets, stated income/stated assets or no statement/verification at all of income and assets, but depending on the overall risk profile you will pay a premium in the quoted interest rate, although increased competition has reduced this premium fairly dramatically.
JA, you betcha.