Lucy died in 2016 with a gross estate of $8,450,000. She made post-1976 taxable gifts of $500,000 upon which she paid no gift tax. In addition, the estate transferred $250,000 to qualified charities and paid $26,000 in medical expenses for the decedent. Referring to the Concept Summary 18.2, Formula for the Federal Estate Tax, determine the following for Lucy's estate.

a. Taxable estate $

b. Tax base $