The cognitive correlates of functional status are essential to dementia case-finding. Nevertheless, cognitive performance is a generally weak predictor of functional outcomes. We have employed structural equation models to explicitly distinguish functional status, and therefore "dementia-relevant" variance in cognitive task performance (i.e., δ) from the variance that is unrelated to a dementing process (i.e., g'). Together, g' + δ encompass Spearman's g. Although δ represents only a small fraction of the total variance in cognitive task performance, it is more strongly associated with dementia status than is g'. In this study, we validate δ in a well characterized Alzheimer's disease cohort, the Texas Alzheimer's Research and Care Consortium. Our approach results in "error free" continuous variables. This suggests that δ can serve as a dementia specific endophenotype. As a result, future studies may be able to associate δ with inflammatory and genetic biomarkers.