Does a penalty pass on to a sub-domain?

I had a site which was slapped with a manual penalty for thin content. I know what the problem is and am in the process of changing the site to pass the manual review.
In the meantime,can I make a subdomain of this site? Or will it pass the penalty on?
Any thoughts appreciated as the site took me a year to build up to have strong url and domain rank

I would switch over to a new domain altogether, though I do not think the penalty would pass over to a sub domain.

A couple years ago i read a seo study that showed domain passes penalties to subdomains, but no viceversa. Subdomains don't pass penalties to main domains. Not sure how it is nowadays, but i would start on a new domain. 10$ is nothing compared to the headache you'll have if you pass the penalty.