diff --git a/app/controllers/budget_categories_controller.rb b/app/controllers/budget_categories_controller.rb
index 0490a5f61..65880ea05 100644
--- a/app/controllers/budget_categories_controller.rb
+++ b/app/controllers/budget_categories_controller.rb
@@ -7,7 +7,15 @@ class BudgetCategoriesController < ApplicationController
   end
 
   def show
+    # The aggregate `Budget#actual_spending` already excludes transactions
+    # whose kind is in BUDGET_EXCLUDED_KINDS (funds_movement, one_time,
+    # cc_payment) via IncomeStatement. The drilldown list must apply the
+    # same filter, otherwise a matched transfer (post-#874 the matcher
+    # correctly tags inflow as funds_movement and outflow per destination
+    # account) shows under the Uncategorized card -- or any retained
+    # category -- even though the aggregate ignores it. See issue #1059.
     @recent_transactions = @budget.transactions
+                                  .where.not(transactions: { kind: Transaction::BUDGET_EXCLUDED_KINDS })
 
     if params[:id] == BudgetCategory.uncategorized.id
       @budget_category = @budget.uncategorized_budget_category
diff --git a/test/controllers/budget_categories_controller_test.rb b/test/controllers/budget_categories_controller_test.rb
index c810baa83..5bea22d96 100644
--- a/test/controllers/budget_categories_controller_test.rb
+++ b/test/controllers/budget_categories_controller_test.rb
@@ -2,6 +2,7 @@ require "test_helper"
 
 class BudgetCategoriesControllerTest < ActionDispatch::IntegrationTest
   include ActionView::RecordIdentifier
+  include EntriesTestHelper
 
   setup do
     sign_in users(:family_admin)
@@ -107,4 +108,58 @@ class BudgetCategoriesControllerTest < ActionDispatch::IntegrationTest
 
     assert_equal 0.0, @electric_budget_category.reload.budgeted_spending.to_f
   end
+
+  test "show drilldown excludes BUDGET_EXCLUDED_KINDS transfers from recent transactions" do
+    # Issue #1059: a matched depository <-> CC pair becomes
+    # (cc_payment outflow + funds_movement inflow). Both kinds are in
+    # BUDGET_EXCLUDED_KINDS so the budget aggregate excludes them, but
+    # the per-category drilldown previously listed them anyway --
+    # appearing under whatever category they retained (or under
+    # Uncategorized once the matcher cleared the category). Filter
+    # them out so the drilldown matches the aggregate.
+    create_transaction(
+      date: @budget.start_date,
+      account: accounts(:depository),
+      amount: 500,
+      name: "BUG_1059_REPRO_OUTFLOW"
+    )
+    create_transaction(
+      date: @budget.start_date,
+      account: accounts(:credit_card),
+      amount: -500,
+      name: "BUG_1059_REPRO_INFLOW"
+    )
+    @family.auto_match_transfers!
+
+    get budget_budget_category_path(@budget, BudgetCategory.uncategorized.id)
+    assert_response :success
+    refute_includes @response.body, "BUG_1059_REPRO_OUTFLOW",
+      "matched cc_payment outflow must not appear in Uncategorized drilldown"
+    refute_includes @response.body, "BUG_1059_REPRO_INFLOW",
+      "matched funds_movement inflow must not appear in Uncategorized drilldown"
+  end
+
+  test "show drilldown still lists loan_payment transfers (intentionally budget-tracked)" do
+    # loan_payment is NOT in BUDGET_EXCLUDED_KINDS. The drilldown should
+    # keep showing loan_payment transfers so the user can see what's
+    # under Uncategorized (or whichever category they manually set).
+    create_transaction(
+      date: @budget.start_date,
+      account: accounts(:depository),
+      amount: 500,
+      name: "MORTGAGE_REPRO_OUTFLOW"
+    )
+    create_transaction(
+      date: @budget.start_date,
+      account: accounts(:loan),
+      amount: -500,
+      name: "MORTGAGE_REPRO_INFLOW"
+    )
+    @family.auto_match_transfers!
+
+    get budget_budget_category_path(@budget, BudgetCategory.uncategorized.id)
+    assert_response :success
+    assert_includes @response.body, "MORTGAGE_REPRO_OUTFLOW",
+      "loan_payment outflow remains visible (kind is not BUDGET_EXCLUDED)"
+  end
 end