In yesterday's Matt Cutts Google Webmaster video he answered the question Can I buy a domain that used to have spam on it and still rank? Theshortcutts.com gives the short answer, "It's possible but can be difficult. Best to get a fresh domain."
I wanted to highlight something I've heard Matt Cutts say dozens of times at conferences.
About 1 minute and 32 seconds in, Matt responds to the question in one way saying:
Some spammer has come a long before you and dug a hole and now when you start out you're already in that hole.
Matt Cutts has often said it is easier to start with a fresh domain that starts at a level playing field, at ground level, as opposed to starting in a hole and having to do all this work just to get to ground level and then have to work to start ranking the site.
We did cover this once before in 2010 with our story Google's Reconsideration Requests May Not Wipe Out Your Old Links.
Here is the video:
Forum discussion at Google+.
Image credit to BigStockPhoto for man digging