Whoever trusts that Jesus is the Christ is born of God (1 John 5:1).
At salvation we receive a new and living spirit that is born of God. Who we really are is our spirit. To call yourself a child of God is to identify yourself by your spirit. God calls us His children and exclusively identifies us by our spirit. Our spirits are righteous, holy, pure, clean, perfect, sinless, and so much more.
When our spirit is born from above we do not lose our flesh. Our flesh is our physical body which is genetically hardwired to sin. With God we are to put to death the deeds of the flesh, refuse to offer our body parts to sin, & allow our mind to be renewed. With these things, mainly allowing God to renew our mind, our outward actions will meet our inward reality. We will "rewire" our flesh.
In 2 Corinthians 5:1-3 our body, the flesh, is called a tent. A tent is a temporary but portable dwelling place. Our body, including our mind, is a faulty tent that needs repairs. We carry it with us until we die. We aren't supposed to determine our identity based on the flesh because God does not identify us that way. "That which is born of the flesh is flesh, and that which is born of the Spirit is spirit" (John 3:6). "We are not in the flesh but in the Spirit because the Spirit of God lives in us. We belong to God" (Romans 8:9). "Because Christ died for all we no longer regard anyone according to the flesh" (2 Corinthians 5:16).
Romans 8:20,23 says, "The creation itself ALSO will be set free from its slavery to corruption into the freedom of the glory of the (spirit born) children of God. We groan within ourselves waiting eagerly for the redemption of our body." We are alredy set free in spirit but the physical world and our physical bodies are not. Why didn't Jesus fix the physical world at the cross too? 2 Corinthians 4 tells us, "We have this treasure (the light of the knowledge of God’s glory displayed in the person of Christ) in jars of clay (earthen vessels, our flesh, our body) to show that this all-surpassing power is from God and not from us." God chose to display His strength in our weakness (2 Corinthians 12:9) so people would know that it is God who works in us to love (Philippians 2:13). Seeing His kindness through us leads them to trust Him (Romans 2:4) to receive His love and His strength.
We, who we really are in our spirit, are dead to (separated from) sin but our flesh is not. Sin cannot stain your spirit. Sin is not a spiritual issue with the Christian. God removed that issue when Christ died for us. Sin is only a humanly relational, physical, & practical issue. It is only an issue between you & God if you don't understand your total forgiveness & new identity in Christ. Even then God is not charging you with sin or counting anything against you. You are just walking in ignorance unable to experience your freedom in Christ. Your ignorance, mistrust, or disbelief are the only possible barriers between you and God. But that doesn't make what Christ did for you less true nor does it mean that God is creating or validating any barriers. You just cannot experience the joy of that truth if you are unaware of it or don't trust it to be true.
The Christian life is very simple and relational. It in many ways works just like normal life except there are many aspects that seem too good to be true. When you trust that they are true you get to enjoy those aspects. If you don't know the truth or trust the truth then the truth doesn't make you aware of your freedom. We are already set free but so many of us have not walked out of our perceived prison cell to enjoy our freedom.