Learn Portuguese (Portugal): Isto é o carro e isso é o livro.

Isto means "this" (an object close to the speaker). Isso means "that" (an object close to the person you are talking to). In this sentence, the speaker is near the car, but the person listening is near the book.

Why do we use o before both carro and livro?

In Portuguese, all nouns have a gender. Both carro (car) and livro (book) are masculine words, which you can usually guess because they end in the letter "-o". Because they are masculine, they must use the masculine word for "the", which is o.

If the nouns are masculine, are isto and isso masculine too?

It might look like it because they end in "-o", but isto and isso are completely neutral. They do not have a masculine or feminine form. You use them when pointing to an object to identify it generally ("This is..."). They never change, even if you are pointing to a feminine word like a casa (the house).

Why do we use é to say "is"?