Final answer:
Foreign securities can indeed qualify as qualified replacement securities if they meet specific legal requirements.
Step-by-step explanation:
Foreign securities may qualify as qualified replacement securities. This statement is true. Qualified replacement securities are certain securities that can replace previously held securities in transactions that are structured to defer capital gains taxes, such as those governed by Section 1042 of the Internal Revenue Code in the United States.
For a security to be considered 'qualified', it typically has to meet certain criteria which often include being issued by a domestic operating company. However, under certain conditions, foreign securities can also qualify if they meet the specific requirements laid out by applicable tax laws.