There are still news regarding Ancelotti to become Brazil manager soon. Brazil must be making a decent effort to convince him to manage themselves. After Tite's period has ended Brazil really need a trustworthy and successful manager to play bigger for championships finally. Ancelotti is obviously one of those candidates to lead this team to victories.
However I don't know what goes around Ancelotti's mind. He has one more year on his contract with Real Madrid. Maybe he would think of staying for that season as well and lead this team to get stronger with new additions in the summer.
At Real Madrid I haven't heard that Real Madrid want to replace Carlo Ancelotti and also that Ancelotti still seems to be at home at Real Madrid, so I think he will stay for at least one more season with Real Madrid at least until his contract expires. Brazil itself is serious about bringing in a coach and Carlo Ancelotti is one of the candidates they are looking at to be able to handle the Samba Team. While Carlo Ancelotti still wants to stay with Real Madrid, and Real Madrid still wants him to manage, it looks like Brazil will have to wait until the end of his contract.