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How does a loss when someone does a conversion from a traditional IRA to a Roth IRA get accounted for?

It doesn't. All distributions from a Traditional IRA, whether they are used to do a conversion or not, are taxed at ordinary income rates. Whether you had a gain or a loss within the Traditional IRA doesn't matter - it's the value of what you are taking out on the date of the distribution.

It used to be that if you did a conversion, and then suffered a loss in the Roth after the conversion, you could do a recharacterization to move the money back to the Traditional IRA, wait a year (I think) and then do another conversion. But since the TCJA eliminated recharacterizations of Roth conversions, that option is no longer available.

Is there a loss carry over to future years to offset future gains from conversions?

No.

AJ
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