Accorsding to https://en.pons.com/translate?q=Schlossl=deenin=lf=de,
Schloss can mean:
clasp (an einer Handtasche)
buckle (an einem Rucksack)
For examples of other ways to use the word Schloss, see https://en.pons.com/translate?q=Schlossl=deenin=lf=de#examples
"Ist das ein Schloss?"
Generally, 'das' is used for both 'this' and 'that'. There is actually a closer equivalent to 'this', 'dies', but it's not a word people actually use in speech.
If you specifically need the meaning of 'that', you can say 'das da' ('that over there', but without the emphasis on location).
TL;DR: "Schloss" doesn't translate as "castle"
Looking in the Longman Dictionary of Contemporary English:
Castle: a very large strong building, built in the past as a safe place that could be easily defended against attack// --Edinburgh Castle// --a ruined castle//
This doesn't really fit a meaning of "Schloss" in any way. See wikipedia:
Schloss (German pronunciation: [ˈʃlɔs]; pl. Schlösser), formerly written Schloß, is the German term for a building similar to a château, palace, or manor house; or what in the British Isles would be known as a stately home or country house.
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Even though it has been discussed in this thread already, I still believe that "Schloss" should not be translated as "castle", as a castle is called Burg in German, i.e. a defensive fortification, while a Schloss is a grandiose residence. While people did also live in castles - and early nobility were the lords of the castles - in later periods they abandoned living in what bascially amounted to front line bases to reside in palaces, which is the appropriate translation for "Schloss", even though in the modern German language it can also refer to any mansion or manor as long as it is grandiose enough.
why is it schloss
It isn't. It's Schloss, with a capital S.
and not schloß
Because since the spelling reform of 1996, we write ß only after a long vowel or a diphthong and ss after a short vowel.
Since Schloss has a short o, we must therefore write Schloss.
Schloß is pre-1996 spelling.