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My Mom has been diagnosed with moderate dementia. She has gone through several huge life changes all at once...selling their house and moving into an independent living apartment at a senior community, she fell while moving and broke her hip. And she lost a sister she was extremely close to. My sister keeps arguing that she’s depressed and does not have dementia since it does not run in our family; although that is what the neurologist is treating her for. How do you tell the difference between depression and dementia?

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Have you considered that it might be both?
There are medications for both.
The life changes you have mentioned can cause depression. The diagnosis of dementia is also enough to make one depressed particularly if they are aware that there is "something wrong" and grasp the diagnosis.
Talking to a therapist might help and at least you would be able to either confirm or rule out depression.
I would also keep a close eye on her as Independent Living might not be the best and she may transition to Assisted or Memory Care sooner than might have been expected.
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I think you can go with the diagnosis from the professional and not a relative.
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dementia:
…memory problems

(depressed people don’t consequently have memory problems).

dementia, as it progresses, becomes more obvious/undeniable:
…more and more memory problems

doesn’t need to run in the family.

they say bad nutrition/lack of exercise can increase the chance of getting it.

i think it’s sometimes a question of luck/bad luck. one either gets it/doesn’t, when one gets older.

hug!!
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