Lets say for example, that your parents leave behind 12 million dollars in S. Korea. You are an American citizen but your parents are Korean. Based on Korean inheritance law, you would have to pay 50% excluding a primary million dollars worth. So in total, you would only inherit 6.5 of the 12 million. How much would you inherit out of the 12 million in US laws? (living in NJ). Would the US citizen (son) have to pay the Korean tax or the US tax?

The inheritance tax is actually an estate tax. The tax is levied on the estate. In your example, the estate is located in South Korea so the US would not tax it.

Even if the US taxed the estate, there would be a credit based on the taxes paid to the foreign country.

I hope this helps.
Gary