From your above post , its clear you have millions of links, which looks spammy. So possible penalty for link spamming and i assume you would have receive mail from google saying unnatural backlinks if you are using webmaster tools.
There are debates going around for long time saying 301 from penalty site can pass the penalty to new domain. But from my experience it did nt happen when I done the same for my penalized site.
If Passing link juice from penalized site can penalize new domain, then it will be the top notch negative seo , where you can simply do the same with your competitor site who are ranking in top 10.
I suggest, move ahead with 301 and update here.
Forgot to add, if your site is de indexed do not try this, as its severe penalty. If it is just rank drops, do it.