If someone is using the backdoor roth / conversion strategy but in the year they retire they roll their 401k into an IRA. (all retirement funds other than roth are in the 401k as of now).

If someone is making after-tax contributions to an IRA and they want to then convert that entire IRA to a Roth. However they are doing some other retirement planning and are considering rolling a portion of their 401k out into an IRA for diversification / income / other investment and planning purposes. When does the IRS deem the pro-rate rules / time period apply.

So if we use this year as an example Do the pro-rata rules apply based on if they had IRA balances at the prior year end (12/31/20), at the time of conversion (now), or if they have IRA balances at the end of this tax year (12/31/21)?

If its the last on (12/31/21), they could still do the back door roth, but that would preclude them from doing any rollover in 2021 correct? Or they could do the rollover, but most of their roth conversion would be deemed taxable vs. just from the after-tax portion of their IRA?