Hi!
Yes, I actually knew a number of girls who did this. They would cut off the end of the shoe, specifically the end of the toe bed so that their toes would hang over the edge. What this does is allow your toes or your moving leg to stay in direct contact with the floor when taking a step. I never did this myself for two reasons: 1) I have fairly long toes, so they came pretty close to the edge of the shoe anyway, and 2) My toes were so tender anyway that I preferred the buffer between me and the floor. This was ages ago when I first started dancing. I have since switched styles, but I suspect that if I were to do latin at this point that I would be cutting my shoes too.
Anyway, in terms of where to cut, it's kind of a personal preference thing. I would start by razoring off the very tip and see how it feels. Better not enough than too much. If it's not enough, slice off a little more. The idea is to slice off just enough to let your toes peek out over the edge when your foot is pointed. When you have the desired length, take the shoes to a cobbler and have him/her seal up the front for you.
I'm sure there are many people who will have opinions about whether or not they like doing this and what methods they use if they do. Best of luck with your dancing!
