In the early stages, before I understood much about dementia, I felt compelled to tell my Mum the truth - ie. "you have AD". She was HUGELY distressed and denied it categorically - absolutely could not accept it and was FURIOUS with me for suggesting she had it.
I learnt from that, and many other experiences, that our "truth" is not always "truth" for the dementia sufferer. We have to enter their world - accept that for them, the truth is sometimes different.
Mum still complains about being "mad", "stupid", "lost my marbles" and is very unhappy (though getting less aware, thank goodness!) of her problems. But she will NEVER accept the diagnosis.
So we just talk about "memory problems" (which, as Hazel said, is still true) and she copes with that.
You know your Mum best - the choice you make (as Hazel said) is : 'Which would be kinder to your mum?'
You are facing a long and difficult road ahead. I'm so sorry for your Mum, and for you. Please come to TP whenever you need support, comfort, solace, a laugh or somewhere to "rant"!