Many have argued on this whether there is a expired domain penalty that really exist.

According to me yes it does exist and mattcutts of Google has discussed about this. So will a expired domain help, In my humble opinion no a expire domain don’t help for getting traffic to other sites.

If you buy a expired domain even if it has some pagerank it will eventually be PR0ed since Google imposes a expired domain penalty as soon as it sees a new site coming up on the old domain. When there is a content change on the expired domain search engine algorithm is designed in such a way that it will detect it and impose a penalty.

Also if the domain has any existing backlinks it will not be given as a credit to the domain. Also there is an other possibility that the backlinks will eventually drop off by itself if the people who already link to that site visits that site and realizes that this is not the site they were linking to before.

Also there a risk that the domain might have been banned or blacklisted in Search engines before you might just buy it without knowing it and eventually its not going to help and a new domain will be much better compared to a domain which had a history of wrong doing.