Should domains be abandoned after Panda/Penguin penalties?

Selected answers from the Dumb SEO Questions Facebook & G+ community.

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  Sarvesh Bagla: We have a client abc.com that came to us for penguin recovery in june. We discovered that it had been penalised for panda as well. Anyway, we finished disavowing their bad links in early july. And started doing seo for their ecommerce store hosted on store.abc.com while waiting for the main domain to recover. When penguin 2.1 rolled out earlier in Oct. the organic traffic for the main domain dipped further which leads to me believe it needs more cleaning up. And the store sub domain is now ranking top 10 for several keywords.
  
  Now, I've recommend to my client that we abandon this domain, buy a new one, move the store to it and setup 301 redirects. Does this make sense to do?
  
  The client also wants to redirect the main domain, but I'm against it. I don't want to redirect a penalised domain to the new one. am i right? would it be ok to redirect if we disavowed more links? What if we just linked from the old site to the new one, without redirecting, and without disavowing any more links?
  
  It's a long question but any help will be appreciated! Thanks!
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  Mike Stetzer: Redirecting a penalized domain to a new domain seems extremely dangerous to me.
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  Leo McDevitt: My concern with moving and redirecting to a new site is that you might move the Penguin penalty with you when you 301 redirect. ;
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  Mike Stetzer: Are you currently doing any natural link-building on the penalized domain? Have you had success in getting links removed?
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  Leo McDevitt: I've been doing natural link building on this site for a while, and it has a few blog articles that survived Penguin and have continued to rank well throughout.
  
  The problem is that the company decided to save money, and outsourced link building to individuals in India. I've had to disavow most of their links. They put us in a bunch of sites that want money to remove links. So link removal has been tough, a battle of inches, with more to go.
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  Mike Stetzer: Outsourcing link building to India!? Yikes. I hope you've had success in getting links removed.
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  Leo McDevitt: We've had to disavow most of the links they built. It's been a huge pain trying to track webmasters down because of "protected" name service.
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  Mike Stetzer: Of course. Seems like everyone blocks their domain registration these days.
  
  I've still sent cease and desist documentation to the phony email addresses that they list so at the very least, I have a record of my attempts at contacting site owners. I'm still pretty leery of the disavow tool, to be honest.
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  Steve Bonin: My understanding is that a 301 redirect will pass most of the penalty along to the new site.
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  Leo McDevitt: I've recorded all my efforts to contact website owners (via Remove'em tool) and I probably have about an 80% no response rate. That doesn't include any invalid email addresses. So it's been the disavowal tool or nothing as far as a lot of these bad links go.
  
  I even tracked down the link-builder in India, and offered to pay him to und-do the work he did. It was hopeless, the guy had no idea what I was talking about.
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  Leo McDevitt: That's what I thought +Steve Bonin ;I'm fairly sure it passes at least 85% of the bad link juice. ;
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  Steve Bonin: Another consideration before going to a new domain would be to recode the site in PHP (if it isn't already) which would break all the links to the .HTML pages then ask the "good linkers" to link back to the site using the page.php url.  ;Further you can clean up the errors by using a 301 redirect to some dummy domain and send all the bad juice there...just thinking on the fly here, I have not tried this.
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  Leo McDevitt: We have a fairly large backlink inventory. It would be quite a task to contact all of the good linkers. Another challenge is the social inbound links, those are pretty much impossible to move.
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  Steve Bonin: Well, you are left with the disavow tool, lots of work, charge by the hour.  ;My guess is that this tool will work eventually as Google sees how it plays out, in the meantime your SERP will be painful...if it is any consolation, you will not be the only one.
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  Sarvesh Bagla: Thanks +Mike Stetzer +Leo McDevitt +Steve Bonin for ur comments. I agree redirecting the penalized domain is risky. But what if I put a message on the homepage that the site has moved and linked to the new domain? And no I haven't manage to remove the links the earlier SEO had built. And I'm not doing any SEO or link building for the old domain.
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  Leo McDevitt: There probably isn't a safe way to transfer the good links to another site.I'd weigh the amount of effort needed to start over and compare that to the twice the amount of effort you think it will take to fix the problem. If building anew would be less effort, then ditch the old site and start fresh.
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  Erik Westesen: My only concern is that the 301 redirect also passes along all the spammy links. If you've done a great job with the disavow work, then it's not a problem... but then you don't need a new domain either.
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  Justin Y: My thoughts are to move on and go fresh. You'll spend a good deal of time setting up the new domain but most likely you'll spend less time than cleaning up the existing domain if its really bad. I think you'd be safe to say the site has been moved but with a nofollow link and zero 301's.
  
  Have a landing page for the old site, include a message saying the site has been moved to a new home followed by the new destination nofollowed. After the new site is up to par in SERPs you can ditch lander if you want.
  
  That's my input, hope that helps.
  
  
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  Sarvesh Bagla: Thanks +Justin Y ;That's what i wanted to hear.