How are carbohydrates converted into fat deposits?

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Disambiguation

There are two ways that carbohydrates and body fat interact. One is directly by turning into body fat, and the other is via insulin.

Turning into body fat is like adding fat into the fat cells, whereas carbohydrates spiking insulin does not add anything to fat cells per se, but hinders the release.

The former is like a + equation, where the latter is a double negative which results in something that seems positive.

Directly through De novo lipogenesis

There is a process called de novo lipogenesis (literally: Creation of fat from non-fat sources) that can occur in the body. This process turns glucose into lipids, which are then stored as body fat.

This process is normally quite inefficient in the body[1], which suggests that carbohydrates cannot be stored as fat to a high degree.

The process can be upregulated (enhanced) if dietary fat comprised almost none of the diet (lesser than 10%, as a rough estimate), if carbohydrate intake is excessively high for a period of a few days, or if one follows an obesogenic diet (diet that is likely to make you fat) for a prolonged period of time.[1][2][3]

Indirectly through insulin

Carbohydrates spike insulin, which is a hormone that mediates glucose metabolism.

Insulin is not good or bad, insulin is insulin. It can be thought of as a lever that switches the body from fat burning mode into carbohydrate burning mode. This allows carbohydrates (and glycogen) to be burnt at a greater rate, but directly reduces the ability of fat to be lost.

Overall metabolic rate (calories burnt over the course of a day) does not change significantly, just where the calories come from.

When insulin is spiked in presence of ingested dietary fat, the dietary fat can go into body fat stores and not be released since glucose from glycogen is being used in place of it.

It should be noted that insulin spiking does not work as a dichotomy (all or nothing). When insulin is 'spiked' it can be spiked to various degrees, and it would hinder fat loss in a proportional degree. It is never 0%, and it is never 100%. There is always a degree of fat being used for energy and always a degree of carbohydrate being used for energy, the amount of each just varies in response to diet and exercise.

References
1.^Acheson KJ, Schutz Y, Bessard T, Anantharaman K, Flatt JP, Jéquier EGlycogen storage capacity and de novo lipogenesis during massive carbohydrate overfeeding in manAm J Clin Nutr.(1988 Aug)
2.^McDevitt RM, Bott SJ, Harding M, Coward WA, Bluck LJ, Prentice AMDe novo lipogenesis during controlled overfeeding with sucrose or glucose in lean and obese womenAm J Clin Nutr.(2001 Dec)
3.^Minehira K, Bettschart V, Vidal H, Vega N, Di Vetta V, Rey V, Schneiter P, Tappy LEffect of carbohydrate overfeeding on whole body and adipose tissue metabolism in humansObes Res.(2003 Sep)