Turning Tool Offsets

I am trying to set up offsets for a few tools and having some issues. In the image below, I have been setting up the tool on the left with X and Z offsets in the location designated "1".
For neutral tools like the one on the right, should location "2" or location "3" be used for setting the X and Z offsets?

These are not pictures of my tools, just images I have found online.

Hi

The only thing that makes sense with lathe tool offsets, is that they position the new tool so that the cutting tip is presented
at the same place on the workpiece, for the same given co-ordinates.

The shape of tools may mean that their usage differs, you would not expect to face off a billet with the second tool
nor to cut a concave arc with the first one.

However if you program in X#billet-diameter Z0, you would expect the centre of the cutting tip to be at that point, not the
shoulder of the tool holder.

regards

Cool thanks. I thought I was setting up the profile tool on the wrong section (right at the tip) but the tip is actually the correct place to do it.
The problem I was having with my offsets was due to my not using G43 during each tool change. For some reason when using my mill any M6 automatically G43's,
but not on my lathe.

Oh well, problem solved!